B-164383, JUNE 27, 1968, 47 COMP. GEN. 792

B-164383: Jun 27, 1968

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THE PURCHASE AGREEMENT ENTERED INTO WITHIN 1 YEAR OF THE TRANSFER NOT CONSTITUTING "SETTLEMENT" WHERE THE CONDITIONS OF THE AGREEMENT THAT THE PURCHASER OBTAIN A LOAN AND THE SELLER COMPLETE THE HOUSE WITHIN 6 MONTHS WERE NOT CONSUMMATED WITHIN 1 YEAR OF THE DATE OF THE EMPLOYEE'S TRANSFER. 1968: REFERENCE IS MADE TO YOUR LETTER OF MAY 20. WHO IS CLAIMING REIMBURSEMENT FOR EXPENSES OF $536 INCURRED IN CONNECTION WITH THE PURCHASE OF A HOUSE INCIDENT TO HIS TRANSFER FROM YOSEMITE NATIONAL PARK. YOU ALSO STATE THE EMPLOYEE IS CLAIMING REIMBURSEMENT FOR A LOAN ORIGINATION CHARGE IN EXCESS OF THE 1 PERCENT LIMITATION IMPOSED BY THE FEDERAL HOUSING ADMINISTRATION REGULATION CONTAINED IN 24 CFR 203.27.

B-164383, JUNE 27, 1968, 47 COMP. GEN. 792

OFFICERS AND EMPLOYEES - TRANSFERS - RELOCATION EXPENSES - "SETTLEMENT DATE" LIMITATION ON PROPERTY TRANSACTIONS AN EMPLOYEE WHO REPORTED TO A NEW DUTY STATION ON OCTOBER 17, 1966, SIGNED AN AGREEMENT ON SEPTEMBER 30, 1967 TO PURCHASE A HOME TO BE CONSTRUCTED, AND COMPLETED PURCHASE OF THE HOME ON MARCH 21, 1968, MAY NOT BE REIMBURSED THE EXPENSE OF A LOAN ORIGINATION CHARGE, THE PURCHASE AGREEMENT ENTERED INTO WITHIN 1 YEAR OF THE TRANSFER NOT CONSTITUTING "SETTLEMENT" WHERE THE CONDITIONS OF THE AGREEMENT THAT THE PURCHASER OBTAIN A LOAN AND THE SELLER COMPLETE THE HOUSE WITHIN 6 MONTHS WERE NOT CONSUMMATED WITHIN 1 YEAR OF THE DATE OF THE EMPLOYEE'S TRANSFER, AS REQUIRED BY SECTION 4.1D OF THE BUREAU OF THE BUDGET CIRCULAR NO. A-56.

TO WILLIAM F. LOCKE, UNITED STATES DEPARTMENT OF THE INTERIOR, JUNE 27, 1968:

REFERENCE IS MADE TO YOUR LETTER OF MAY 20, 1968, REQUESTING OUR DECISION ON TWO QUESTIONS RELATIVE TO THE PROPRIETY OF CERTIFYING A VOUCHER IN FAVOR OF MR. JOHN B. MCLEOD, AN EMPLOYEE OF YOUR AGENCY, WHO IS CLAIMING REIMBURSEMENT FOR EXPENSES OF $536 INCURRED IN CONNECTION WITH THE PURCHASE OF A HOUSE INCIDENT TO HIS TRANSFER FROM YOSEMITE NATIONAL PARK, CALIFORNIA, TO SAN FRANCISCO, CALIFORNIA.

YOU STATE THE EMPLOYEE REPORTED FOR DUTY OCTOBER 17, 1966, AT HIS NEW STATION, SIGNED AN AGREEMENT SEPTEMBER 30, 1967, TO PURCHASE A HOME TO BE CONSTRUCTED, AND COMPLETED THE HOME PURCHASE MARCH 21, 1968. YOU ALSO STATE THE EMPLOYEE IS CLAIMING REIMBURSEMENT FOR A LOAN ORIGINATION CHARGE IN EXCESS OF THE 1 PERCENT LIMITATION IMPOSED BY THE FEDERAL HOUSING ADMINISTRATION REGULATION CONTAINED IN 24 CFR 203.27. YOU ASK (1) WHETHER SETTLEMENT WAS EFFECTED WITHIN THE 1 YEAR LIMITATION PERIOD IN SUBSECTION 4.1D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, REVISED OCTOBER 12, 1966, AND (2) IF SETTLEMENT WAS MADE WITHIN THE TIME LIMITATION SHOULD PAYMENT OF THE LOAN ORIGINATION FEE BE LIMITED TO 1 PERCENT OF THE ORIGINAL AMOUNT OF THE MORTGAGE.

WE DO NOT FIND ANY BASIS UNDER THE REGULATION FOR THE VIEW THAT THE SIGNING OF THE CUSTOMARY AGREEMENT FOR THE PURCHASE OF REAL ESTATE IS TANTAMOUNT TO "SETTLEMENT" AS THAT TERM IS ORDINARILY USED AND UNDERSTOOD. B-163700, MAY 6, 1968. IT IS, THEREFORE, NECESSARY IN A CONTRACT FOR THE PURCHASE OF A HOUSE TO BE CONSTRUCTED TO EXAMINE THE PURCHASE AGREEMENT TO DETERMINE WHEN THE TRANSACTION WAS CONSUMMATED. 160799, MAY 20, 1968. IN THIS CASE EXAMINATION OF THE PURCHASE AGREEMENT INDICATES CONSUMMATION OF THE TRANSACTION WAS CONTINGENT ON SUCH FACTORS AS THE PURCHASER OBTAINING A LOAN AND THE SELLER COMPLETING THE HOUSE WITHIN 6 MONTHS. IN VIEW OF THIS WE MAY NOT CONSIDER THE DATE OF THE PURCHASE CONTRACT AS THE SETTLEMENT DATE. SINCE THE CONDITIONS IN THE PURCHASE AGREEMENT WERE NOT MET WITHIN 1 YEAR OF THE DATE OF THE TRANSFER, AS EVIDENCED BY THE CLOSING STATEMENT OF MARCH 21, 1968, THE VOUCHER, RETURNED HEREWITH, MAY NOT BE CERTIFIED FOR PAYMENT.

OUR REPLY TO YOUR FIRST QUESTION RENDERS UNNECESSARY A RESPONSE TO YOUR SECOND QUESTION.