B-164044, JUN. 7, 1968

B-164044, JUN. 7, 1968

TO MR. A. E. DAZELL:

WE REFER TO YOUR LETTER OF APRIL 11, 1968, YOUR REFERENCE 2-363, BY WHICH YOU REQUEST OUR ADVANCE DECISION WHETHER YOU MAY PROPERLY CERTIFY FOR PAYMENT THE VOUCHER OF MR. RICHARD J. BECKMAN, AN EMPLOYEE OF THE BUREAU OF RECLAMATION, UNITED STATES DEPARTMENT OF THE INTERIOR, TO REIMBURSE HIM CERTAIN EXPENSES HE INCURRED IN CONNECTION WITH THE PURCHASE OF A LOT AND CONSTRUCTION OF A RESIDENCE AT HIS NEW OFFICIAL STATION INCIDENT TO HIS TRANSFER FROM SANTA FE, NEW MEXICO, TO AUBURN, CALIFORNIA, WHICH WAS EFFECTIVE ON JUNE 22, 1967.

EVIDENCE FURNISHED WITH MR. BECKMAN'S VOUCHER SHOWS THAT THE SETTLEMENT DATE FOR THE PURCHASE OF THE LAND ON WHICH HE CONTRACTED TO HAVE A RESIDENCE CONSTRUCTED WAS SEPTEMBER 12, 1967. HOWEVER, THE INFORMATION PROVIDED DOES NOT SHOW A SPECIFIC DATE ON WHICH CONSTRUCTION OF THE RESIDENCE WAS TO BE COMPLETED AND ACCEPTED BY THE EMPLOYEE.

SECTION 4 OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 AUTHORIZES THE REIMBURSEMENT OF CERTAIN EXPENSES INCURRED BY AN EMPLOYEE IN THE PURCHASE AND SALE OF RESIDENCES. WE BELIEVE THAT THE PROCEDURES BY WHICH THE EMPLOYEE ACQUIRED A RESIDENCE IN THIS CASE MAY BE VIEWED AS A SINGLE TRANSACTION INVOLVING THE PURCHASE OF A RESIDENCE FOR THE PURPOSE OF SECTION 4 OF CIRCULAR NO. A-56. ACCORDINGLY, IF THE EMPLOYEE HAS ACCEPTED THE COMPLETED RESIDENCE AND MOVED INTO IT, REIMBURSEMENT OF EXPENSES OTHERWISE ALLOWABLE UNDER THAT SECTION WOULD BE PROPER. IN CONNECTION WITH THE TIME LIMITATION PRESCRIBED BY SECTION 4.1D OF CIRCULAR NO. A-56 THE DATE CONTROLLING WOULD BE THAT DATE ON WHICH THE EMPLOYEE ACCEPTED THE COMPLETED RESIDENCE. YOU SHOULD OBTAIN MORE SPECIFIC INFORMATION FROM MR. BECKMAN WITH REGARD TO THE DATES ON WHICH HE ACCEPTED THE COMPLETED RESIDENCE AND MOVED INTO IT PRIOR TO CERTIFYING ANY AMOUNT FOR PAYMENT UNDER THE VOUCHER SUBMITTED.

ASSUMING THE EMPLOYEE MEETS THAT CONDITIONS SPECIFIED ABOVE THE AMOUNTS CLAIMED FOR REIMBURSEMENT OF THE LOAN ORIGINATION FEE AND FOR REIMBURSEMENT OF THE CHARGES INVOLVED IN RECORDING THE DEED TRANSFERRING THE LAND APPEAR TO BE PROPERLY REIMBURSABLE.

REGARDING THE TITLE INSURANCE CHARGES -- A TOTAL OF $270.60 -- THE BASIC CHARGE OF $158.50 WOULD BE REIMBURSABLE ONLY TO THE EXTENT THAT IT IS A CHARGE FOR A MORTGAGE TITLE POLICY AND NOT FOR AN OWNER'S TITLE POLICY AND ONLY TO THE EXTENT THAT IT REPRESENTS A CHARGE CUSTOMARILY PAID BY THE PURCHASER IN THE AREA INVOLVED. THE "ALTA PORTION" CHARGE OF $46.70 WOULD BE REIMBURSABLE IF THAT PROTECTION WAS REQUIRED FOR OBTAINING THE MORTGAGE AND IF IT IS AN ITEM CUSTOMARILY PAID BY THE PURCHASER IN THE AREA INVOLVED. THE INDORSEMENT CHARGES - $56.40 -- APPARENTLY WERE ASSESSED BECAUSE THE RESIDENCE WAS NOT COMPLETED AT THE TIME THE POLICY WAS ISSUED. THE INDORSEMENTS SEEM TO HAVE BEEN ISSUED WHEN THE LOCATION OF THE RESIDENCE ON THE LAND WAS FIXED, WHEN THE BUILDER HAD RELEASED HIS LIENS AGAINST THE IMPROVED PROPERTY, AND WHEN THE COMPLETED RESIDENCE WAS ACCEPTED BY THE EMPLOYEE. SUCH ADDITIONAL CHARGES RESULT FROM THE FACT THAT A RESIDENCE IS BUILT AFTER A POLICY OF TITLE INSURANCE IS ISSUED WHICH WOULD NOT OCCUR IN CONNECTION WITH THE PURCHASE OF A COMPLETED RESIDENCE. IN VIEW THEREOF, THOSE CHARGES WOULD NOT BE REIMBURSABLE. IF, AS APPEARS TO BE THE CASE, THE $6 INSPECTION FEE WAS ASSESSED BY THE TITLE INSURANCE COMPANY BECAUSE THE RESIDENCE WAS CONSTRUCTED AFTER ISSUANCE OF THE BASIC POLICY THAT ITEM ALSO WOULD BE FOR DISALLOWANCE.

THE VOUCHER WHICH IS RETURNED HEREWITH TOGETHER WITH ENCLOSURES MAY BE CERTIFIED FOR PAYMENT ONLY IN ACCORDANCE WITH THE ABOVE.