Can landlord do major repair with tenants in unit?

[Deke Belden]

Hey BP community, as a landlord (but very new one) I have been asked a question by a friend.  He moved into one half of a 3 BR duplex a few months ago, and the landlord has been VERY slow at dealing with utility issues and varies other things the whole time.  Yesterday they found mold and rot in the basement and the contractor on site said they'd likely be tearing out the entire rear wall (interior and exterior) as well as a lot of interior wall area of the unit to make the full repair.  My friend doesn't want to have his family have to live through all of that, and he's sick of how the landlord has been treating him already.  Under what conditions could he claim that the landlord isn't fulfilling his lease obligations?  He really wants to avoid bringing a lawsuit due to the expense, time, and headache involved.  If the landlord would just let him out of the lease he'd be elated to just move on.  Any advice would be very welcomed.