A-11406, OCTOBER 28, 1925, 5 COMP. GEN. 300

A-11406: Oct 28, 1925

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TERMINATION - ADVANCE PAYMENTS WHERE IT IS SHOWN TO BE IN THE INTERESTS OF THE UNITED STATES. AS SUCH PAYMENT IS NOT IN CONTRAVENTION OF SECTION 3648. 1925: I HAVE YOUR LETTER OF SEPTEMBER 29. THE QUESTION PRESENTED WILL BE CONSIDERED AND ANSWERED WITH THE ASSUMPTION THAT THERE IS AN EXISTING LEGAL CONTRACT OF LEASE. THAT THE OPTION TO HOLD OVER FOR THE FISCAL YEAR 1926 WAS PROPERLY EXERCISED AS PROVIDED IN THE ORIGINAL FORMAL LEASE. THE PAYMENT OF RENT IN ADVANCE IS PROHIBITED BY PROVISIONS OF SECTION 3648. THERE IS NOT PRESENTED HERE. IT IS RATHER A QUESTION OF THE VALIDITY OF A PROPOSED AGREEMENT TO TERMINATE THE LEASE IN THE INTEREST OF THE UNITED STATES INVOLVING A PAYMENT OF THE AMOUNT OF $450 TO THE LESSOR TO SECURE SUCH TERMINATION AND THEREBY OBTAIN A RELEASE FROM ANY OBLIGATION FOR RENT FOR THE PERIOD FROM JANUARY 1 TO JUNE 30.

A-11406, OCTOBER 28, 1925, 5 COMP. GEN. 300

LEASES, TERMINATION - ADVANCE PAYMENTS WHERE IT IS SHOWN TO BE IN THE INTERESTS OF THE UNITED STATES, THE PAYMENT OF THE EQUIVALENT OF THREE MONTHS' RENT IN ADVANCE FOR THE PURPOSE OF TERMINATING A LEASE, NOT CONTAINING A CANCELLATION AGREEMENT, MAY BE AUTHORIZED, AS SUCH PAYMENT IS NOT IN CONTRAVENTION OF SECTION 3648, REVISED STATUTES, PROHIBITING ADVANCE PAYMENTS.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, OCTOBER 28, 1925:

I HAVE YOUR LETTER OF SEPTEMBER 29, 1925, REQUESTING DECISION AS TO THE LEGALITY OF PAYING RENT IN ADVANCE FOR A PERIOD OF THREE MONTHS (OCTOBER 1 TO DECEMBER 31, 1925) ON PREMISES LOCATED AT 913 UNION STREET, BROOKLYN, N.Y., OCCUPIED BY THE PUBLIC HEALTH SERVICE UNDER A LEASE, WITHOUT CANCELLATION CLAUSE, FOR THE TERM JULY 1, 1925, TO JUNE 30, 1926, AT AN ANNUAL RENTAL OF $1,800, IN ORDER TO SECURE RELEASE FROM THE LESSOR OF THE PAYMENT OF RENT FOR THE REMAINDER OF THE FULL TERM, THUS EFFECTING A POSSIBLE SAVING TO THE UNITED STATES OF $900.

THE QUESTION PRESENTED WILL BE CONSIDERED AND ANSWERED WITH THE ASSUMPTION THAT THERE IS AN EXISTING LEGAL CONTRACT OF LEASE, THAT THE OPTION TO HOLD OVER FOR THE FISCAL YEAR 1926 WAS PROPERLY EXERCISED AS PROVIDED IN THE ORIGINAL FORMAL LEASE, AND THAT SAID LEASE CONTAINS NO CANCELLATION AGREEMENT.

THE PAYMENT OF RENT IN ADVANCE IS PROHIBITED BY PROVISIONS OF SECTION 3648, REVISED STATUTES, THAT---

NO ADVANCE OF PUBLIC MONEY SHALL BE MADE IN ANY CASE WHATEVER. AND IN ALL CASES OF CONTRACTS FOR THE PERFORMANCE OF ANY SERVICE, OR THE DELIVERY OF ARTICLES OF ANY DESCRIPTION, FOR THE USE OF THE UNITED STATES, PAYMENT SHALL NOT EXCEED THE VALUE OF THE SERVICE RENDERED OR OF THE ARTICLES DELIVERED PREVIOUSLY TO SUCH PAYMENT. * * * (SEE 23 COMP. DEC. 653; 2 COMP. GEN. 127.)

THERE IS NOT PRESENTED HERE, HOWEVER, A QUESTION ESSENTIALLY OF THE PAYMENT OF RENT IN ADVANCE. IT IS RATHER A QUESTION OF THE VALIDITY OF A PROPOSED AGREEMENT TO TERMINATE THE LEASE IN THE INTEREST OF THE UNITED STATES INVOLVING A PAYMENT OF THE AMOUNT OF $450 TO THE LESSOR TO SECURE SUCH TERMINATION AND THEREBY OBTAIN A RELEASE FROM ANY OBLIGATION FOR RENT FOR THE PERIOD FROM JANUARY 1 TO JUNE 30, 1926, AMOUNTING TO $900. THIS PLAN OF TERMINATION THERE IS NO CONFLICT WITH ANY EXISTING STATUTE. SEE 25 COMP. DEC. 398.

NO OBJECTION THEREFORE APPEARS TO THE PAYMENT OF THE AMOUNT OF $450 TO EFFECT THE PROPOSED TERMINATION AGREEMENT WITH THE UNDERSTANDING THAT THE ASSUMPTIONS SET FORTH IN PARAGRAPH 2 HEREOF ARE CORRECT AND THAT IT HAS BEEN ADMINISTRATIVELY DETERMINED THAT THE PROPOSED TERMINATION WOULD BE MORE ADVANTAGEOUS TO THE GOVERNMENT THAN TO RETAIN THE PREMISES WITH A POSSIBILITY OF SUBLETTING.