I'm new to the landlording business, but I would strongly recommend he contact an attorney before he does anything. I would assume it would depend on what is written in the lease, but cash-for-keys is always an option if he can get the tenant to agree to it. I would be very careful if he wants to inform the families of the situation. I would recommend that he doesn't mention the name of the tenant who was arrested. After all, the tenant was arrested but not convicted, yet. In the off chance that the tenant is found innocent, they could possibly sue your brother for slander (or whatever the appropriate legal term is.) But again, contact an attorney for true legal advice.
Hopefully some more experienced landlords will chime in here.
