B-162511, OCT. 13, 1967

B-162511: Oct 13, 1967

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

IF OBTAINING INSURANCE WAS PREREQUISITE TO TRANSFER OR TO OBTAINING FINANCING THEN IT NEED NOT BE VIEWED AS FOR BENEFIT OF PURCHASER FOR EXCLUSION AS REIMBURSABLE ITEM. THIS ITEM SUSPENDED AS ESCROW FEE IN THE AMOUNT OF $50.75 WAS PAID IN CONNECTION WITH PURCHASE OF RESIDENCE AT RENO. THIS ITEM WAS DISALLOWED IN ACCORDANCE WITH BOB CIRCULAR A-56. MORTGAGE INSURANCE AND INSURANCE AGAINST DAMAGE OR LOSS OF PROPERTY ARE NOT REIMBURSABLE.-" THE ITEMS CLAIMED WERE INCURRED INCIDENT TO MR. WE NOTE THAT HE SAYS THAT LOCAL REAL ESTATE AND TITLE INSURANCE REPRESENTATIVES ADVISED HIM THAT IT IS COMMON PRACTICE IN THE STATE OF NEVADA FOR THE BUYER AND THE SELLER EACH TO PAY ONE-HALF OF THE ESCROW FEE.

B-162511, OCT. 13, 1967

EMPLOYEES - TRANSFERS - PUBLIC LAW 89-516 - HOME SALE/PURCHASE EXPENSE DECISION TO CERTIFYING OFFICER OF THE BUREAU OF MINES CONCERNING CLAIM OF EMPLOYEE FOR REAL ESTATE COSTS INCIDENT TO TRANSFER FROM BOULDER CITY TO RENO, NEVADA. EMPLOYEE WHO HAD CLAIM FOR ONE-HALF OF ESCROW FEE PAID ON SALE OF HOME AT FORMER STATION DISALLOWED BECAUSE HE HAD BEEN REIMBURSED FOR PORTION OF ESCROW FEE FOR PURCHASE OF RESIDENCE AT NEW STATION HAD CLAIM PROPERLY DISALLOWED NOTWITHSTANDING PRACTICE IN NEVADA FOR BUYER AND SELLER TO SHARE ESCROW FEE SINCE SEC. 4.2 (C) OF BOB CIRCULAR A-56 PRECLUDES REIMBURSEMENT FOR SAME TYPES OF COSTS AT BOTH LOCATIONS. WITH REFERENCE TO CLAIM FOR INSURANCE FEE, REIMBURSEMENT DEPENDS UPON PRACTICE CUSTOMARILY FOLLOWED IN AREA. IF OBTAINING INSURANCE WAS PREREQUISITE TO TRANSFER OR TO OBTAINING FINANCING THEN IT NEED NOT BE VIEWED AS FOR BENEFIT OF PURCHASER FOR EXCLUSION AS REIMBURSABLE ITEM. B-161459, JUNE 27, 1967.

TO MRS. JEANNETTE B. WILBANKS:

WE REFER TO YOUR LETTER OF SEPTEMBER 15, 1967, REQUESTING A DECISION CONCERNING THE PROPRIETY OF CERTIFYING FOR PAYMENT A VOUCHER TRANSMITTED THEREWITH IN FAVOR OF MR. MORTON M. WONG IN THE AMOUNT OF $70.10. YOUR LETTER DESCRIBES THE TWO ITEMS CLAIMED ON SUCH VOUCHER AS FOLLOWS:

"1. ONE-HALF ESCROW FEE PAID ON SALE OF HOME AT BOULDER CITY - $32.50. THIS ITEM SUSPENDED AS ESCROW FEE IN THE AMOUNT OF $50.75 WAS PAID IN CONNECTION WITH PURCHASE OF RESIDENCE AT RENO. BUREAU OF THE BUDGET CIRCULAR A-56, SEC. 4.2C STATES -SAME TYPES OF COSTS SHALL NOT BE PAID AT BOTH LOCATIONS-.

"2. ATA TITLE INSURANCE, PURCHASE OF HOME AT RENO - $32.50. THIS ITEM WAS DISALLOWED IN ACCORDANCE WITH BOB CIRCULAR A-56, SEC. 4.2D. * * * - COSTS OF OTHER TYPES OF INSURANCE INCLUDING RECORD TITLE POLICIES, OWNER'S POLICIES, MORTGAGE INSURANCE AND INSURANCE AGAINST DAMAGE OR LOSS OF PROPERTY ARE NOT REIMBURSABLE.-"

THE ITEMS CLAIMED WERE INCURRED INCIDENT TO MR. WONG'S CHANGE OF OFFICIAL STATION FROM BOULDER CITY, NEVADA, TO RENO, NEVADA, IN ACCORDANCE WITH TRAVEL AUTHORIZATION DATED JANUARY 13, 1967.

CONCERNING THE ONE-HALF ESCROW FEE CLAIMED BY MR. WONG, WE NOTE THAT HE SAYS THAT LOCAL REAL ESTATE AND TITLE INSURANCE REPRESENTATIVES ADVISED HIM THAT IT IS COMMON PRACTICE IN THE STATE OF NEVADA FOR THE BUYER AND THE SELLER EACH TO PAY ONE-HALF OF THE ESCROW FEE. SINCE MR. WONG WAS REIMBURSED ONE-HALF OF THE ESCROW FEE CLAIMED INCIDENT TO THE PURCHASE OF A RESIDENCE AT HIS NEW STATION IN RENO, WE CONCUR IN YOUR VIEW THAT SECTION 4.2 (C) OF BUREAU OF THE BUDGET CIRCULAR NO. A 56, REVISED OCTOBER 12, 1966, WOULD PRECLUDE MR. WONG FROM ALSO BEING REIMBURSED FOR ONE-HALF OF THE ESCROW FEE PAID INCIDENT TO THE SALE OF HIS RESIDENCE AT HIS OLD STATION, BOULDER CITY, NEVADA.

WHETHER THE REIMBURSEMENT OF THE $37.60 ITEM REPRESENTING TITLE INSURANCE INCIDENT TO PURCHASE OF THE HOME AT RENO IS REIMBURSABLE WOULD DEPEND UPON THE PRACTICE CUSTOMARILY FOLLOWED IN THE AREA. WE UNDERSTAND THAT NO SEPARATE AMOUNT WAS CLAIMED REPRESENTING EXPENSES OF A TITLE SEARCH. ALSO, WE NOTE THAT CLAIMANT DISCLAIMS ANY SIMILAR AMOUNT ALLOWED INCIDENT TO THE SALE OF HIS HOME AT BOULDER CITY. IF SUCH IS THE CASE AND IF THE OBTAINING OF THE INSURANCE WAS PREREQUISITE TO THE TRANSFER OF THE PROPERTY OR TO OBTAINING FINANCING INCIDENT TO SUCH TRANSFER, THEN SUCH ITEM NEED NOT BE VIEWED AS HAVING BEEN INCURRED PRIMARILY FOR THE BENEFIT AND PROTECTION OF THE PURCHASER SO AS TO BE EXCLUDED AS A REIMBURSABLE ITEM UNDER SECTION 4.2 (D) OF THE CITED CIRCULAR. COMPARE DECISION OF JUNE 27, 1967, B 161459, A COPY OF WHICH IS ENCLOSED. THE VOUCHER IS RETURNED.