(a) If the dwelling unit or premises are damaged or destroyed by fire or casualty to the extent that enjoyment of the dwelling unit is substantially impaired, the tenant shall
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(1) immediately vacate the premises and notify the landlord of the intention to terminate the rental agreement, in which case the rental agreement terminates as of the date of vacating; or(2) if continued occupancy is lawful, vacate the part of the dwelling unit rendered unusable by the fire or casualty, in which case the tenant’s liability for rent is reduced in proportion to the diminution in the fair rental value of the dwelling unit.(b) If the rental agreement is terminated, the landlord shall return all prepaid rent and security deposits recoverable under Alaska Stat. § 34.03.070. Accounting for rent in the event of termination or apportionment shall occur as of the date of the casualty.
