B-166317, MAY 9, 1969

B-166317: May 9, 1969

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HE ENTERED INTO A MORTGAGE AGREEMENT SECURING A LOAN TO FINANCE PURCHASE OF THE LOT AND CONSTRUCTION OF THE RESIDENCE FOR WHICH A LOAN CLOSING STATEMENT WAS EXECUTED ON AUGUST 6. THAT STATEMENT INCLUDING THE NOTATION "THIS IS SUBJECT TO CHANGE AT THE OPTION OF FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION.'. ALSO ON AUGUST 6 HE EXECUTED A CLOSING STATEMENT FOR PURCHASE OF THE LOT ON WHICH THE RESIDENCE WAS TO BE CONSTRUCTED. WHICH WAS ON AUGUST 8. DUE TO HEAVY RAINS AND A HURRICANE IN THE AREA CONSTRUCTION WAS NOT COMPLETED WITHIN THE TIME SPECIFIED. A SUPPLEMENTAL CONSTRUCTION LOAN CLOSING STATEMENT WAS EXECUTED AND ON THAT DATE THE CONTRACTOR RECEIVED FINAL PAYMENT FOR CONSTRUCTION OF THE RESIDENCE IN ACCORDANCE WITH TERMS OF THE BUILDING AND CONSTRUCTION AGREEMENT.

B-166317, MAY 9, 1969

TO CAPTAIN J. E. DUNKLEY, U.S.A.:

THIS REFERS TO YOUR LETTER OF FEBRUARY 18, 1969, REFERENCE DCRA FOAAP, FORWARDED TO OUR OFFICE BY LIEUTENANT COLONEL A. LABARBERA ON FEBRUARY 28, 1969, REFERENCE DSAH-CFF, DEFENSE SUPPLY AGENCY, HEADQUARTERS, CAMERON STATION, ALEXANDRIA, VIRGINIA, REQUESTING AN ADVANCE DECISION ON AN APPEAL FROM DENIAL OF REIMBURSEMENT OF REAL ESTATE EXPENSES INCURRED BY MR. GEORGE E. SAAD IN CONNECTION WITH HIS TRANSFER FROM CLEARWATER, FLORIDA, TO ST. PETERSBURG, FLORIDA.

THE APPEAL AND SUPPORTING DOCUMENTS SHOW THAT MR. SAAD ENTERED ON DUTY AT ST. PETERSBURG ON NOVEMBER 12, 1967. ON JULY 6, 1968, HE ENTERED INTO A BUILDING AND CONSTRUCTION AGREEMENT FOR CONSTRUCTION OF A RESIDENCE ON A LOT OWNED BY THE EMPLOYEE; ON AUGUST 5, 1968, HE ENTERED INTO A MORTGAGE AGREEMENT SECURING A LOAN TO FINANCE PURCHASE OF THE LOT AND CONSTRUCTION OF THE RESIDENCE FOR WHICH A LOAN CLOSING STATEMENT WAS EXECUTED ON AUGUST 6, 1968, THAT STATEMENT INCLUDING THE NOTATION "THIS IS SUBJECT TO CHANGE AT THE OPTION OF FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION.' ALSO ON AUGUST 6 HE EXECUTED A CLOSING STATEMENT FOR PURCHASE OF THE LOT ON WHICH THE RESIDENCE WAS TO BE CONSTRUCTED.

TERMS OF THE CONSTRUCTION AGREEMENT PROVIDED THAT CONSTRUCTION WOULD BE COMPLETED WITHIN 100 DAYS FROM COMMENCEMENT, WHICH WAS ON AUGUST 8, 1968. HOWEVER, DUE TO HEAVY RAINS AND A HURRICANE IN THE AREA CONSTRUCTION WAS NOT COMPLETED WITHIN THE TIME SPECIFIED. ON NOVEMBER 8, 1968, WITH THE CONSENT OF THE CONTRACTOR, THE EMPLOYEE MOVED HIS HOUSEHOLD FURNISHINGS INTO THE NEW PREMISES; HOWEVER, HE DID NOT OTHERWISE OCCUPY THEM UNTIL NOVEMBER 20, 1968. ON NOVEMBER 27, 1968, A SUPPLEMENTAL CONSTRUCTION LOAN CLOSING STATEMENT WAS EXECUTED AND ON THAT DATE THE CONTRACTOR RECEIVED FINAL PAYMENT FOR CONSTRUCTION OF THE RESIDENCE IN ACCORDANCE WITH TERMS OF THE BUILDING AND CONSTRUCTION AGREEMENT.

SECTION 4.1D OF BUREAU OF THE BUDGET CIRCULAR A-56 WHICH GOVERNS REIMBURSEMENT OF EXPENSES OF REAL ESTATE TRANSACTIONS INCURRED INCIDENT TO TRANSFERS REQUIRES THAT, IN ORDER TO AUTHORIZE REIMBURSEMENT:

"THE SETTLEMENT DATES FOR THE SALE AND PURCHASE * * * TRANSACTIONS FOR WHICH REIMBURSEMENT IS REQUESTED ARE NOT LATER THAN ONE YEAR AFTER THE DATE ON WHICH THE EMPLOYEE REPORTED FOR DUTY AT THE NEW OFFICIAL STATION, EXCEPT THAT AN APPROPRIATE EXTENSION OF TIME MAY BE AUTHORIZED BY THE HEAD OF THE DEPARTMENT OR HIS DESIGNEE WHEN SETTLEMENT IS NECESSARILY DELAYED BECAUSE OF LITIGATION.'

THE EMPLOYEE SAYS THAT HIS CLAIM FOR REIMBURSEMENT SHOULD BE ALLOWED FOR SEVERAL REASONS, AMONG THEM THAT: CONSTRUCTION DELAY WAS CAUSED BY AN ACT OF GOD; HE WAS NOT GIVEN NOTICE OF BUREAU OF THE BUDGET CIRCULAR A-56; THE DATE OF EXECUTION OF THE CONSTRUCTION LOAN CLOSING STATEMENT ON AUGUST 6, 1968, WAS THE DATE OF SETTLEMENT; AND BECAUSE THE DATE PREMISES WERE OCCUPIED BY HOUSEHOLD FURNISHINGS AND HE RECEIVED A KEY TO THE DWELLING WAS NOVEMBER 8, 1968.

ASSOCIATE COUNSEL FOR DEFENSE CONTRACT ADMINISTRATION SERVICES OFFICES, ST. PETERSBURG, RECOMMENDS REIMBURSEMENT OF THE EXPENSES AS EQUITABLE ON THE GROUND THAT PURCHASE OF THE LOT ON WHICH THE RESIDENCE WAS CONSTRUCTED WAS CONSUMMATED PRIOR TO THE ANNIVERSARY DATE OF ENTRANCE ON DUTY.

THIS OFFICE HAS HELD THAT WHILE THE PURCHASE OF A LOT AND CONSTRUCTION OF A RESIDENCE THEREON MAY BE VIEWED AS A SINGLE TRANSACTION, THE CONTROLLING DATE FOR COMPLIANCE WITH THE TIME LIMITATION OF CIRCULAR NO. A-56 IS THE DATE ON WHICH THE COMPLETED RESIDENCE IS ACCEPTED AND THE EMPLOYEE HAS MOVED INTO IT. B-164044, JUNE 7, 1968; 47 COMP. GEN. 792; B-164452, JULY 2, 1968; B-164457, DECEMBER 12, 1968; B-165121, SEPTEMBER 18, 1968, COPIES ENCLOSED. IN THIS CASE, THE EMPLOYEE DID NOT MOVE INTO THE RESIDENCE UNTIL AFTER THE ANNIVERSARY DATE OF ENTRY ON DUTY, AND THE TRANSACTION WAS NOT FINALLY CONSUMMATED BY PAYMENTS TO THE CONTRACTOR AS REQUIRED BY THE CONSTRUCTION AGREEMENT UNTIL AFTER THAT DATE.

WE HAVE ALSO HELD THAT FAILURE TO COMPLETE REAL ESTATE TRANSACTIONS PRIOR TO THE REGULATORY TIME LIMIT DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE EMPLOYEE DOES NOT PERMIT ALLOWANCE OF REIMBURSEMENT. B 163700, MAY 6, 1968, B-164145, JUNE 3, 1968, COPIES ENCLOSED. SEE ALSO 47 COMP. GEN. 753, COPY ENCLOSED, IN WHICH REIMBURSEMENT WAS DENIED WHERE CONSTRUCTION WAS DELAYED BY ADVERSE WEATHER CONDITIONS AND INADEQUATE LABOR.

UNDER THE CONTROLLING STATUTORY REGULATIONS AND DECISIONS OF THIS OFFICE WE FIND NO BASIS FOR ALLOWING THE CLAIM. THE VOUCHER AND SUPPORTING PAPERS WILL BE RETAINED HERE.