B-165512, NOV. 4, 1968

B-165512: Nov 4, 1968

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THE TWO ITEMS INVOLVED IN THE RECLAIM VOUCHER ARE THE TITLE INSURANCE PREMIUM ($138.46) MR. WHICH IS IN THE WASHINGTON. THE TITLE INSURANCE PREMIUM AND CHARGES HE PAID FOR EXAMINATION AND CERTIFICATION OF TITLE ($237.50) IN CONNECTION WITH THE PURCHASE OF A RESIDENCE WERE CONSIDERED TO BE SIMILAR TYPES OF COSTS AND ONLY THE LARGER OF THE TWO WAS ALLOWED UNDER THE REQUIREMENTS OF SECTION 4.2 OF BUREAU OF THE BUDGET CIRCULAR NO. THE CLOSING FEE HE PAID IN CONNECTION WITH THE SALE AND THE SETTLEMENT FEE HE PAID IN CONNECTION WITH THE PURCHASE WERE CONSIDERED TO BE SIMILAR TYPES OF COSTS AND ONLY THE LARGER OF THE TWO WAS ALLOWED. TO THE EXTENT SUCH COSTS HAVE NOT BEEN INCLUDED IN BROKERS' SIMILAR SERVICES FOR WHICH REIMBURSEMENT IS CLAIMED UNDER OTHER CATEGORIES.

B-165512, NOV. 4, 1968

TO MISS OPAL A. SHELTON:

WE REFER TO YOUR LETTER OF OCTOBER 22, 1968, YOUR REFERENCE F50, BY WHICH YOU REQUEST OUR ADVANCE DECISION WITH REGARD TO THE ENCLOSED RECLAIM TRAVEL VOUCHER OF MR. MAURICE H. LUNDY, AN EMPLOYEE OF THE BUREAU OF OUTDOOR RECREATION, DEPARTMENT OF THE INTERIOR, FOR REIMBURSEMENT OF CERTAIN EXPENSES HE INCURRED IN CONNECTION WITH THE SALE AND PURCHASE OF RESIDENCES INCIDENT TO HIS TRANSFER FROM SEATTLE, WASHINGTON, TO WASHINGTON, D. C., ABOUT JUNE 1968.

THE TWO ITEMS INVOLVED IN THE RECLAIM VOUCHER ARE THE TITLE INSURANCE PREMIUM ($138.46) MR. LUNDY PAID IN CONNECTION WITH THE SALE OF HIS SEATTLE RESIDENCE AND THE SETTLEMENT FEE ($25) HE PAID IN CONNECTION WITH THE PURCHASE OF A RESIDENCE IN ARLINGTON, VIRGINIA, WHICH IS IN THE WASHINGTON, D.C. AREA. THE TITLE INSURANCE PREMIUM AND CHARGES HE PAID FOR EXAMINATION AND CERTIFICATION OF TITLE ($237.50) IN CONNECTION WITH THE PURCHASE OF A RESIDENCE WERE CONSIDERED TO BE SIMILAR TYPES OF COSTS AND ONLY THE LARGER OF THE TWO WAS ALLOWED UNDER THE REQUIREMENTS OF SECTION 4.2 OF BUREAU OF THE BUDGET CIRCULAR NO. A-56. SIMILARLY, THE CLOSING FEE HE PAID IN CONNECTION WITH THE SALE AND THE SETTLEMENT FEE HE PAID IN CONNECTION WITH THE PURCHASE WERE CONSIDERED TO BE SIMILAR TYPES OF COSTS AND ONLY THE LARGER OF THE TWO WAS ALLOWED.

SECTION 4.2C OF CIRCULAR NO. A-56 PROVIDES:

"C. LEGAL AND RELATED COSTS. TO THE EXTENT SUCH COSTS HAVE NOT BEEN INCLUDED IN BROKERS' SIMILAR SERVICES FOR WHICH REIMBURSEMENT IS CLAIMED UNDER OTHER CATEGORIES, CUSTOMARY COSTS OF SEARCHING TITLE, PREPARING CONVEYANCES AND OTHER INSTRUMENTS, AND PREPARING CONTRACTS, RELATED NOTARY FEES, RECORDING FEES, MAKING SURVEYS, PREPARING DRAWINGS OR PLATS WHEN REQUIRED FOR LEGAL OR FINANCING PURPOSES, AND SIMILAR EXPENSES, MAY BE REIMBURSED EITHER WITH RESPECT TO SALE OF THE RESIDENCE AT THE OLD OFFICIAL STATION OR PURCHASE OF A DWELLING AT THE NEW OFFICIAL STATION, BUT THE SAME TYPES OF COSTS SHALL NOT BE PAID AT BOTH LOCATIONS. COSTS OF LITIGATION ARE NOT REIMBURSABLE.'

IN THE DECISION 46 COMP. GEN. 884 WE RECOGNIZED THAT THE CUSTOM IN CERTAIN AREAS IS FOR THE SELLER OF A RESIDENCE TO FURNISH A POLICY OF TITLE INSURANCE FOR THE BENEFIT OF THE BUYER INSTEAD OF PROVING THAT HIS TITLE TO THE PROPERTY IS MARKETABLE BY SOME OTHER MEANS. WE HELD IN THAT DECISION THAT THE TITLE INSURANCE PREMIUM PAID BY THE SELLER IN SUCH CIRCUMSTANCES IS REIMBURSABLE UNDER THE QUOTED SECTION OF CIRCULAR NO. A- 56, AND THAT REIMBURSEMENT NEED NOT BE DISALLOWED UNDER THE PROVISION OF SECTION 4.2D WHICH PROHIBITS REIMBURSEMENT FOR THE COST OF AN OWNER'S TITLE POLICY. SINCE THE TWO CHARGES HERE INVOLVED- TITLE POLICY PREMIUM AND EXAMINATION AND CERTIFICATION OF INVOLVED -- TITLE POLICY PREMIUM AND EXAMINATION AND CERTIFICATION OF TITLE -- ARE INCURRED FOR THE PURPOSE OF SHOWING THE VALIDITY AND MARKETABILITY OF THE SELLER'S TITLE WE CONSIDER THEM TO BE THE SAME TYPE OF COST. IF THE TITLE POLICY WAS NOT FOR THE PURPOSE OF ESTABLISHING MARKETABILITY OF TITLE, THE COST THEREOF COULD NOT BE ALLOWED BECAUSE OF THE SPECIFIC PROHIBITION IN SECTION 4.2D REFERRED TO ABOVE. THEREFORE, MR. LUNDY WAS PROPERLY REIMBURSED ONLY THE LARGER OF THE TWO.

THE DISALLOWANCE OF THE $25 SETTLEMENT FEE IN CONNECTION WITH THE PURCHASE OF THE RESIDENCE IN ARLINGTON WAS BASED ON THE FACT THAT A "CLOSING FEE" IN A LARGER AMOUNT WAS ALLOWED IN CONNECTION WITH THE SALE OF THE SEATTLE RESIDENCE. ON THE BASIS OF THE INFORMATION PRESENTED BOTH OF THOSE CHARGES APPEAR TO HAVE BEEN MADE FOR THE SERVICES OF THE AGENT OR ATTORNEY WHO HANDLED THE SALE TRANSACTION. APPARENTLY, UNDER THE CUSTOMS OF THE RESPECTIVE AREAS, THE SELLER IS CHARGED THE COST OF THAT SERVICE IN THE SEATTLE AREA WHEREAS THE BUYER IS CHARGED THE COST OF THE SAME TYPE SERVICE IN THE ARLINGTON, VIRGINIA AREA. UNDER SECTION 4.2 OF CIRCULAR NO. A-56 BOTH SUCH CHARGES MAY NOT BE REIMBURSED.

ON THE BASIS OF THE INFORMATION PRESENTED, THE RECLAIM VOUCHER WHICH IS RETURNED HEREWITH MAY NOT PROPERLY BE CERTIFIED FOR PAYMENT.