(ii) where no previous increase was granted within the useful life of the item or equipment being replaced and the cost of repair is more than 75 percent of the cost of replacement, grant a prorated increase based upon the remaining useful life;
(iii) where it is determined that an item is eligible to be replaced during its useful life, grant an increase based upon the difference between the substantiated cost of the item or equipment, including installation, and (a) the amount reimbursed from other sources, such as insurance proceeds or any other form of commercial guarantee, and (b) the amount of any increase previously granted for the same item or equipment either as a major capital improvement, or pursuant to other governmental programs, if such item or equipment has not exhausted at least 75 percent of its useful life at the time of the installation;
(iv) where it is determined that an item is eligible to be replaced even though it has not exhausted 75 percent of its useful life and that it was installed as part of a substantial rehabilitation or the new construction of a building for which the owner set initial building-wide rents, the DHCR may reduce the increase granted for a major capital improvement by a proportion of the remaining useful life of such item or equipment.
(5) Notwithstanding the provisions of subclause (4) of this clause, where an owner had substantially commenced work on the major capital improvement installation before February 1, 1991, based on prior DHCR decisions and policies, and where adherence to useful life requirements or to the conditions of the waiver would create an undue hardship, the owner's application will be determined in accordance with those prior decisions and policies.