Consult with an attorney to make sure that the arrangement is legit. 

He is arranging the inspection with my realtor.

It was total ******** and we knew it so instead of going back and forth, we basically told them that it seems like this arrangement isn't working out the way they intended and asked them if they would like to terminate the lease. 

Is this arrangement common?

There will be much lower demand for this living arrangement in the future and that's good news for us Thanks for bring it up @Evan Bradley. 

I would renew the lease on a month to month term and inform the tenant that it’s because you both are entering a new arrangement and the new agreement allows for both parties to exit the agreement with ease.

Your lease should specify this arrangement, since both of the above are required before handing over the keys to the tenants.

If they want it furnished, I will arrange with a rental company to deliver and pickup and that cost is also added to the bill. 

Just be nice no evictions offer instead cash for keys or some arrangement like you pay for their moving truck if they agree to leave on a set date. 

Twitter, for example, just announced that they will allow permanent WFH arrangements for any employees who don't need to be physically in the office (which is most of them).