(a) A landlord may file an application for an increase in maximum rents on the ground that the current maximum gross building rental established pursuant to section 2201.4 or 2201.5 of this Title does not equal the sum of:

1. (1) the real estate taxes, water charges and sewer rents on the property;
2. (2) the operating and maintenance expenses of the property;
3. (3) an allowance for the vacancy and collection losses on the property; and

4. (4) a return of 8½ percent on capital value which, except as provided in subdivisions (b) and (c) of this section, shall be the equalized assessed value obtained by multiplying the current assessed value of the property by the current equalization ratio established by the New York State Board of Equalization and Assessment pursuant to article 12-A of the Real Property Tax Law.

   Increases or decreases in real estate taxes, water charges, sewer rents, and wages currently in effect may be projected in making such computation.

(b) The administrator may make a determination that:

1. (1) capital value is an amount different from that prescribed in subdivision (a) of this section, where there has been a reduction in assessed valuation for the year next preceding the effective date of the assessed valuation in effect at the time of the filing of the application; or
2. (2) capital value is equal to five times the equalized assessed value of the buildings, where the assessed valuation of the land exceeds four times the assessed valuation of the buildings thereon.

(c) The administrator may make a determination that capital value is an amount different from that prescribed in subdivision (a) of this section, where there has been a bona fide sale of the property since February 1, 1961, as the result of a transaction at arm's length, on normal financing terms, at a readily ascertainable price, and unaffected by special circumstances such as, but not limited to, a forced sale, exchange of property, package deal, wash sale or a sale to a cooperative. In determining whether a sale was on normal financing terms, the administrator shall give due consideration to the following factors:

1. (1) the ratio of the cash payment received by the seller to the sales price of the property and the annual gross income from the property;
2. (2) the total amount of the outstanding mortgages which are liens against the property (including purchase money mortgages), as compared with the equalized assessed value of the property;
3. (3) the ratio of the sales price to the annual gross income of the property, with consideration given to the total amount of rent adjustments previously granted, exclusive of rent adjustments because of changes in dwelling space, services, furniture, furnishings or equipment, major capital improvements or substantial rehabilitation;
4. (4) the presence of deferred amortization in purchase money mortgages, or the assignment of such mortgages at a discount; and
5. (5) any other facts and circumstances surrounding such sale which, in the judgment of the administrator, may have a bearing upon the question of financing.