B-165686, DEC. 20, 1968

B-165686, DEC. 20, 1968

TO MR. R. J. LIGHT:

WE REFER TO YOUR LETTER OF NOVEMBER 21, 1968, BY WHICH YOU REQUEST OUR ADVANCE DECISION WHETHER YOU MAY PROPERLY CERTIFY FOR PAYMENT THE ENCLOSED TRAVEL VOUCHER OF MR. FAIN M. RANKIN, JR., AN EMPLOYEE OF THE BUREAU OF NARCOTICS AND DANGEROUS DRUGS, DEPARTMENT OF JUSTICE, TO REIMBURSE HIM CERTAIN COSTS HE INCURRED IN PURCHASING A RESIDENCE AT HIS NEW OFFICIAL STATION INCIDENT TO HIS TRANSFER FROM INDIANAPOLIS, INDIANA, TO CHICAGO, ILLINOIS, WHICH WAS EFFECTIVE FEBRUARY 26, 1968.

MR. RANKIN'S CLAIM IS FOR $882.75 WHICH AMOUNT WAS SUSPENDED FROM HIS ORIGINAL VOUCHER FOR REIMBURSEMENT OF EXPENSES CONNECTED WITH HIS TRANSFER. INCLUDED IN THE PRESENT CLAIM IS AN ITEM FOR $260 WHICH REPRESENTS A CHARGE BY THE LENDING INSTITUTION OF 1 PERCENT OF THE LOAN OBTAINED BY THE CLAIMANT IN CONNECTION WITH HIS PURCHASE OF A RESIDENCE AND WHICH HE HAS SHOWN TO BE A LOAN ORIGINATION FEE AND NOT A MORTGAGE DISCOUNT OR POINTS. ACCORDINGLY, REIMBURSEMENT OF THAT ITEM IS PROPER.

THE BALANCE OF THE CLAIM CONSISTS OF THE AMOUNT MR. RANKIN PAID HIS ATTORNEY IN CONNECTION WITH SETTLEMENT ON THE RESIDENCE HE PURCHASED FOR THE FOLLOWING ITEMS:

1. LEGAL SERVICES INCLUDING "CHECKING THE TITLE, CHECKING THE DEED, MAKING SURE THAT ALL DOCUMENTS REGARDING THE MORTGAGE WERE IN PROPER ORDER AND HANDLING THE CLOSING OF THE REAL ESTATE TRANSACTION" -- $350.

2. DISBURSEMENT BY THE ATTORNEY TO A SAVINGS AND LOAN INSTITUTION FOR RELEASE OF THE ORIGINAL MORTGAGE COMMITMENT WHICH WAS NECESSITATED BY THE FACT THAT THE INSTITUTION WAS CLOSED BECAUSE OF FINANCIAL DIFFICULTIES - $86.75.

3. DISBURSEMENT BY THE ATTORNEY TO THE SELLER OF THE RESIDENCE FOR ONE MONTH'S MORTGAGE PAYMENT MADE NECESSARY BY THE ONE MONTH DELAY IN SETTLEMENT OF THE SALE AS A RESULT OF THE FAILURE OF THE FIRST MORTGAGE COMMITMENT - $186.

SECTION 4.2 OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 SPECIFIES THE TYPES OF EXPENSES WHICH ARE ALLOWABLE IN CONNECTION WITH THE RULE AND PURCHASE OF RESIDENCES. THAT SECTION DOES NOT AUTHORIZE REIMBURSEMENT OF UNUSUAL EXPENSES INCURRED BY AN EMPLOYEE BECAUSE OF DIFFICULTIES INVOLVED IN HIS REAL ESTATE TRANSACTION. REIMBURSABLE COSTS ARE ONLY THOSE WHICH ARE NORMALLY CONNECTED WITH A REAL ESTATE TRANSACTION IN THE AREA CONCERNED AND NOT EXTRAORDINARY COSTS WHICH MAY ARISE IN CONNECTION WITH THE CONSUMMATION OF A PARTICULAR TRANSACTION. FURTHER, THE MISCELLANEOUS EXPENSE ALLOWANCE IS LIMITED TO REIMBURSEMENT OF COSTS "INHERENT IN RELOCATION OF A PLACE OF RESIDENCE.' SEC. 3.1B, CIRCULAR NO. A-56. WE DO NOT BELIEVE COSTS INCURRED BECAUSE OF THE FAILURE OF THE EMPLOYEE'S FIRST MORTGAGE COMMITMENT MAY BE CONSIDERED AS BEING COVERED BY THAT ALLOWANCE. THEREFORE, ITEMS 2 AND 3 ABOVE MAY NOT PROPERLY BE ALLOWED.

WITH REGARD TO REIMBURSEMENT OF ATTORNEY FEES WE HAVE HELD THAT SECTION 4.2C OF CIRCULAR NO. A-56 DOES NOT AUTHORIZE REIMBURSEMENT OF FEES CHARGED BY AN ATTORNEY FOR REPRESENTING AND COUNSELING AN EMPLOYEE WITH RESPECT TO A REAL ESTATE TRANSACTION. THE ATTORNEY FEE FOR WHICH REIMBURSEMENT IS AUTHORIZED BY THAT SECTION IS THE FEE CHARGED FOR SEARCHING TITLE AND PREPARING DOCUMENTS IN CONNECTION WITH THE SALE OR PURCHASE OF A RESIDENCE. B-163420, MARCH 25, 1968; B 163203, MARCH 1, 1968, COPIES ENCLOSED. AS INDICATED BY THE ATTORNEY'S INVOICE AND HIS LETTER OF EXPLANATION DATED OCTOBER 22, 1968, WHICH IS QUOTED IN ITEM 1 ABOVE, THE FEE HERE INVOLVED IS PRIMARILY FOR ADVISORY SERVICES ALTHOUGH THE LETTER OF OCTOBER 22 DOES INDICATE THAT THE SERVICES RENDERED MAY HAVE INCLUDED A CHARGE SEARCHING TITLE. IF THE EMPLOYEE CAN IDENTIFY THE AMOUNT ALLOCABLE, IF ANY, TO SEARCHING TITLE HE MAY BE REIMBURSED FOR THAT PART OF THE ATTORNEY FEE. HOWEVER, ON THE BASIS OF THE INFORMATION PRESENTED REIMBURSEMENT OF THE $350 ATTORNEY FEE IS NOT AUTHORIZED.

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