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(4) Adjustment of Base Year Net Operating Income. The Rent Board will grant an <br />adjustment of the Base Year, if the Landlord can demonstrate no fair return in the Base <br />Year as set forth in this section based on at least one of the following findings: <br />(A) Exceptional Expenses in the Base Year. The Landlord's operating expenses <br />in the base year were unusually high or low in comparison to other years. In such <br />instances, adjustments may be made in calculating operating expenses so the base <br />year operating expenses reflect average expenses for the Covered Rental <br />Unit/Mobilehome Park over a reasonable period. The following factors shall be <br />considered in making such a finding: <br />(i) Extraordinary amounts were expended for necessary maintenance and <br />repairs. <br />(ii) Maintenance and repair was below accepted standards to cause <br />significant deterioration in the quality of services provided. <br />(iii) Other expenses were unreasonably high or low notwithstanding the <br />application of prudent business practices. <br />(B) Exceptional Circumstances in the Base Year. The gross income during the <br />base year was disproportionately low due to exceptional circumstances. In such <br />instances, adjustments may be made in calculating base year gross rental income <br />consistent with the purposes of this Chapter. The following factors shall be <br />considered in making such a finding: <br />(i) If the gross income during the base year was lower than it might have <br />been because some residents were charged reduced Rent. <br />(ii) If the gross income during the base year was significantly lower than <br />normal because of the destruction of the premises and/or temporary <br />eviction for construction or repairs. <br />(iii) The pattern of Rent increases in the years prior to the base year and <br />whether those increases reflected increases in the CPI. <br />(iv) Base period Rents were disproportionately low in comparison to the <br />base period Rents of other Rental Units in the City. <br />(v) Other exceptional circumstances. <br />(5) Calculation of Net Operating Income. <br />(A) Net Operating Income. Net operating income shall be calculated by <br />subtracting operating expenses from gross rental income. <br />(B) Gross Rental Income. <br />(i) Gross rental income shall include: <br />(I) Gross rents calculated as gross rental income at one hundred <br />percent occupancy, adjusted for uncollected Rents due to vacancy <br />and bad debts to the extent such vacancies or bad debt are beyond <br />the control of the Landlord. Uncollected Rents in excess of three <br />percent (3%) of gross rent shall be presumed to be unreasonable <br />M <br />