B-140816, OCT. 27, 1959

B-140816: Oct 27, 1959

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IN SUCH CASES BOTH THE HUSBAND AND WIFE ARE DESIGNATED AS OWNERS OF THE PROPERTY AND BOTH SIGN THE LEASE AS LESSORS. RENTAL PAYMENTS UNDER MOST OF THESE LEASES ARE PAYABLE AT THE END OF EACH MONTH. THE RENT IS PAYABLE AT THE END OF EACH QUARTER. THE MATTER IS REFERRED TO OUR OFFICE. IN THE LIGHT OF THE FOREGOING OUR APPROVAL IS REQUESTED FOR THE CHIEF OF ENGINEERS OR HIS DESIGNEE TO MAKE RENTAL PAYMENTS TO THE SURVIVING SPOUSE. THAT HUSBAND AND WIFE ARE DESIGNATED AS OWNERS OF THE PROPERTY AND BOTH SIGN THE LEASE AS LESSORS. "B. THAT IT IS DETERMINED UNDER THE LAW OF THE DOMICILE THAT HUSBAND AND WIFE OWN THE PROPERTY AS TENANTS BY THE ENTIRETY OR AS JOINT TENANTS WITH THE RIGHT OF SURVIVORSHIP.

B-140816, OCT. 27, 1959

TO THE SECRETARY OF THE ARMY:

A LETTER DATED SEPTEMBER 18, 1959, ENGLS-GENERAL, FROM THE ASSISTANT CHIEF OF ENGINEERS FOR REAL ESTATE, DEPARTMENT OF THE ARMY, RELATES TO THE PRACTICE, UNDER THE GAO MANUAL FOR GUIDANCE OF FEDERAL AGENCIES, TITLE 4, CHAPTER 3500, OF REFERRING TO OUR OFFICE THE PAYMENT OF RENTALS IN THE CASE OF A DECEASED LESSOR.

THE CORPS OF ENGINEERS, AS THE REAL ESTATE AGENT FOR THE DEPARTMENT OF THE ARMY, THE DEPARTMENT OF THE AIR FORCE, AND THE ATOMIC ENERGY COMMISSION, ENTERS INTO MANY LEASES. FREQUENTLY, THE LEASES INVOLVE PROPERTY HELD BY HUSBAND AND WIFE AS TENANTS BY THE ENTIRETY OR AS JOINT TENANTS, ESTATES INVOLVING THE RIGHT OF SURVIVORSHIP. IN SUCH CASES BOTH THE HUSBAND AND WIFE ARE DESIGNATED AS OWNERS OF THE PROPERTY AND BOTH SIGN THE LEASE AS LESSORS. RENTAL PAYMENTS UNDER MOST OF THESE LEASES ARE PAYABLE AT THE END OF EACH MONTH; UNDER SOME, THE RENT IS PAYABLE AT THE END OF EACH QUARTER.

IN THE EVENT OF THE DEATH OF EITHER SPOUSE DURING THE TERM OF THE LEASE THERE FREQUENTLY ARISES THE QUESTION OF THE ENTITLEMENT OF THE SURVIVOR TO THE ACCRUED RENTAL, AND THE MATTER IS REFERRED TO OUR OFFICE. THE RESULTANT DELAY IN PAYMENT OFTEN IMPOSES A HARDSHIP UPON THE SURVIVING SPOUSE, PARTICULARLY AS MILITARY DISBURSING OFFICERS DECLINE TO MAKE FURTHER PAYMENTS UNDER THE LEASE PENDING DETERMINATION OF THE ENTITLEMENT OF THE SURVIVING SPOUSE TO THE ACCRUED RENTAL AT THE TIME OF THE DEATH OF THE OTHER SPOUSE.

IN THE LIGHT OF THE FOREGOING OUR APPROVAL IS REQUESTED FOR THE CHIEF OF ENGINEERS OR HIS DESIGNEE TO MAKE RENTAL PAYMENTS TO THE SURVIVING SPOUSE, WITHOUT REFERENCE TO OUR OFFICE, UNDER THE FOLLOWING CIRCUMSTANCES:

"A. THAT HUSBAND AND WIFE ARE DESIGNATED AS OWNERS OF THE PROPERTY AND BOTH SIGN THE LEASE AS LESSORS.

"B. THAT IT IS DETERMINED UNDER THE LAW OF THE DOMICILE THAT HUSBAND AND WIFE OWN THE PROPERTY AS TENANTS BY THE ENTIRETY OR AS JOINT TENANTS WITH THE RIGHT OF SURVIVORSHIP.

"C. THAT IT IS DETERMINED THE SURVIVING SPOUSE BECOMES THE OWNER OF THE PROPERTY BY RIGHT OF SURVIVORSHIP, OR OTHERWISE, UPON THE DEATH OF THE OTHER SPOUSE AND IS SUCH OWNER AT THE TIME THE RENT IS PAYABLE.'

IT IS UNDERSTOOD THE PAYMENTS CONTEMPLATED ARE THOSE WHICH BECOME DUE OR PAYABLE SUBSEQUENT TO VESTING OF SOLE OWNERSHIP IN THE SURVIVOR, EVEN THOUGH THE PERIOD COVERED BY THE RENTAL MAY EXTEND PRIOR THERETO.

YOU ARE ADVISED WE WOULD HAVE NO OBJECTION TO THE ADOPTION OF THE PROCEDURE SUGGESTED, THE SURVIVING SPOUSE BEING GENERALLY ENTITLED TO THE RENT FALLING DUE SUBSEQUENT TO THE DEATH OF THE OTHER SPOUSE AND THE MATURING OF THE RIGHT OF SURVIVORSHIP. SEE TIFFANY REAL PROPERTY (3RD ED.), VOLUME 3, SECTION 888. MOREOVER, IF BY VIRTUE OF LOCAL STATUTE OR LAW DOUBT EXISTS AS TO THE ENTITLEMENT OF THE SURVIVING SPOUSE TO THE WHOLE OF A PARTICULAR RENTAL PAYMENT, THE DISPOSITION OF SUCH PAYMENT MAY BE REFERRED TO OUR OFFICE WITHOUT DELAY IN THE MAKING OF SUBSEQUENT PAYMENTS AS TO WHICH NO DOUBT EXISTS REGARDING THE SURVIVING SPOUSE'S ENTITLEMENT.

THE LETTER OF THE ASSISTANT CHIEF OF ENGINEERS FURTHER STATES:

"* * * IT IS ALSO PROPOSED THAT WHERE APPROPRIATE AND POSSIBLE, TO PROVIDE IN ALL FUTURE LEASES WHERE HUSBAND AND WIFE ARE DESIGNATED AS OWNERS AND LESSORS THAT UPON THE DEATH OF THE HUSBAND OR WIFE, ALL RENTALS NOT PAID PRIOR TO DEATH SHALL BE PAID TO THE SURVIVING SPOUSE.'

WE WOULD HAVE NO OBJECTION TO THE INCLUSION, WHERE APPROPRIATE, OF SUCH A PROVISION IN LEASE AGREEMENTS ENTERED INTO BY THE CORPS OF ENGINEERS.