15.04.160 Special base year NOI/base rent adjustments.

(A) Park owners may obtain a one-time special adjustment to the base year NOI and/or base date rent(s), if the park owner rebuts the presumption that the base year NOI and/or base date rent(s) yielded a fair return. The arbitrator shall not make such a determination unless the arbitrator has first made at least one of the following findings:

(1) That the park owner's operating expenses in the base year were unusually high or low in comparison to the three years prior to the base year. The average expenses for this period shall be presumed to reflect reasonable average annual expenses and the average of such expenses shall be used to calculate and adjust the base year NOI.

In determining whether the park owner's operating expenses were unusually high or low, the arbitrator shall consider whether:

(a) The park owner made substantial capital improvements during the base year, which were not reflected in the rent levels on the base date,

(b) Substantial repairs were made due to uninsured damage caused by fire, natural disaster or vandalism,

(c) Maintenance and repair were below accepted standards so as to cause significant deterioration in the quality of housing services, or

(d) Other expenses were unreasonably high or low notwithstanding the following of prudent business practice;

(2) That the rent was disproportionate due to one of the enumerated factors below:

(a) The rent on the base date was exceptionally high or low due to the fact that the rent was not established in an arms-length transaction, or

(b) The rent on the base date was substantially higher or lower than at other times of the year by reason of premiums being charged or rebates given for reasons unique to particular spaces.

(B) If the circumstances specified in subsection (A)(2) of this section are demonstrated, the base date rent shall be adjusted to reflect the rent that would have been received if the base date rent had been set under general market conditions. In making this adjustment, the arbitrator shall utilize the median rent in effect on the base date, or a good faith estimate of such median rent, for comparable spaces within the park or, if necessary, other comparable parks. Comparability shall be judged based on the location of the park, services, amenities provided, and other relevant factors.