B-167985, OCT. 15, 1969

B-167985: Oct 15, 1969

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ATTORNEY FEES TRANSFERRED EMPLOYEE WHO WAS REIMBURSED $415 LEGAL FEE INCIDENT TO NEW RESIDENCE PURCHASE. SINCE ALL SERVICES HERE WERE INCLUDED IN ALL INCLUSIVE "LEGAL FEE. IT IS UNNECESSARY TO CONSIDER WHETHER ATTORNEY'S CHANGES IN SALES CONTRACT CONSTITUTED "PREPARATION" WITHIN MEANING OF SAID SECTION. MRAVCA'S ATTORNEY IS REIMBURSABLE UNDER SECTION 4.2C OF BUREAU OF THE BUDGET CIRCULAR A-56. SECTION 4.2C PROVIDES THAT TO THE EXTENT SUCH COSTS HAVE NOT BEEN INCLUDED IN THE BROKER'S OR SIMILAR SERVICES FOR WHICH REIMBURSEMENT IS CLAIMED UNDER OTHER CATEGORIES. WE RECOGNIZE THAT THE $415 WAS A ONE PERCENT CHARGE SUGGESTED MINIMUM FEE FOR REAL ESTATE TRANSACTIONS IN THE CHICAGO AREA AS SET BY THE CHICAGO BAR ASSOCIATION.

B-167985, OCT. 15, 1969

OFFICERS AND EMPLOYEES--TRANSFERS--RELOCATION EXPENSES--ATTORNEY FEES TRANSFERRED EMPLOYEE WHO WAS REIMBURSED $415 LEGAL FEE INCIDENT TO NEW RESIDENCE PURCHASE, WHICH INCLUDED ALL SERVICES OF ATTORNEY WITHOUT FEE BREAKDOWN, SHOULD BE REQUIRED TO REFUND FULL AMOUNT SINCE LUMP-SUM FEE SCHEDULE DOES NOT CONFORM TO REQUIREMENTS FOR REIMBURSEMENT OF ALLOWABLE ITEMS AS SPECIFIED IN SEC. 4.2C, BUREAU OF BUDGET CIR. NO. A 56, WHEREUNDER REIMBURSABLE FEES AND CHARGES MUST BE STATED (ITEMIZED) WITHIN GUIDELINES SET FORTH THEREIN TO PERMIT PAYMENT DETERMINATION. SINCE ALL SERVICES HERE WERE INCLUDED IN ALL INCLUSIVE "LEGAL FEE," AND AUTHORIZING REGULATION MAKES NO PROVISION FOR PAYMENT OF SUCH FEE, IT IS UNNECESSARY TO CONSIDER WHETHER ATTORNEY'S CHANGES IN SALES CONTRACT CONSTITUTED "PREPARATION" WITHIN MEANING OF SAID SECTION.

TO MR. T. F. THULSTRUP:

WE REFER TO YOUR LETTER OF SEPTEMBER 5, 1969, CONCERNING THE REIMBURSEMENT MADE TO MR. ANDREW E. MRAVCA FOR THE ATTORNEY FEE HE PAID IN CONNECTION WITH THE PURCHASE OF A RESIDENCE IN NAPERVILLE, ILLINOIS, INCIDENT TO A CHANGE IN HIS OFFICIAL DUTY STATION FROM OAK BROOK TO WESTON, ILLINOIS, IN JUNE 1968.

YOU QUESTION WHETHER ALL OR ANY PART OF THE FEE FOR LEGAL SERVICES PROVIDED BY MR. MRAVCA'S ATTORNEY IS REIMBURSABLE UNDER SECTION 4.2C OF BUREAU OF THE BUDGET CIRCULAR A-56, AUTHORIZING REIMBURSEMENT OF LEGAL AND RELATED COSTS. SECTION 4.2C PROVIDES THAT TO THE EXTENT SUCH COSTS HAVE NOT BEEN INCLUDED IN THE BROKER'S OR 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 THE SALE OF THE RESIDENCE AT THE OLD OFFICIAL STATION OR PURCHASE OF A DWELLING AT THE NEW OFFICIAL STATION, BUT THE SAME TYPE OF COSTS SHALL NOT BE PAID AT BOTH STATIONS.

IN A LETTER OF JULY 16, 1968, ADDRESSED TO MR. MRAVCA, HIS ATTORNEY DESCRIBES THE LEGAL SERVICES RENDERED AS FOLLOWS: "EXAMINATION AND APPROVAL OF REAL ESTATE SALES CONTRACT; EXAMINATION AND APPROVAL OF MORTGAGE AND PRIMISSORY NOTE TO REPUBLIC SAVINGS AND LOAN ASSOCIATION; EXAMINATION AND APPROVAL OF CHICAGO TITLE AND TRUST COMPANY COMMITMENT FOR TITLE INSURANCE; CONFERENCES WITH REPUBLIC SAVINGS AND LOAN ASSOCIATION, LOAN STATEMENT; CONFERENCE WITH JOSEPH A. THORSEN CO. (REALTORS) CLOSING STATEMENT AND SURRENDER OF POSSESSION; POWER OF ATTORNEY; TELEPHONE CONVERSATIONS TO PRINCETON, NEW JERSEY; CLOSING AND PAYMENT OF PURCHASE PRICE; EXAMINATION AND APPROVAL OF CHICAGO TITLE AND TRUST CO. OWNER'S POLICY AND RECORDED WARRANTY DEED ....... MINIMUM CHICAGO BAR ASSOCIATION FEE .......... $415.'

ALTHOUGH THE ATTORNEY DID NOT GIVE A BREAKDOWN ON THE $415 LEGAL FEE, HE HAS STATED THAT HE MADE CERTAIN CHANGES IN THE SALES CONTRACT FOR MR. MRAVCA. THESE CONSISTED OF A CHANGE IN THE PURCHASE PRICE PURSUANT TO AGREEMENT OF THE PARTIES AND DELETION OF VARIOUS CLAUSES IN THE STANDARD FORM CONTRACT.

WE RECOGNIZE THAT THE $415 WAS A ONE PERCENT CHARGE SUGGESTED MINIMUM FEE FOR REAL ESTATE TRANSACTIONS IN THE CHICAGO AREA AS SET BY THE CHICAGO BAR ASSOCIATION. HOWEVER, A LUMP-SUM FEE SCHEDULE DOES NOT CONFORM TO THE REQUIREMENTS FOR REIMBURSEMENT OF ALLOWABLE ITEMS AS SPECIFIED IN SECTION 4.2C. B-163203, MARCH 24, 1969. FURTHERMORE, SECTION 4.2C MAKES NO PROVISION FOR PAYMENT OF ALL INCLUSIVE SERVICE "LEGAL FEES". B-163690, MARCH 28, 1968.

THE LEGAL FEES AND CHARGES REIMBURSABLE BY THE UNITED STATES IN CASES SUCH AS THIS MUST BE STATED (ITEMIZED) WITHIN THE GUIDELINES OF SECTION 4.2C BEFORE A DETERMINATION AS TO PAYMENT CAN BE MADE. THUS, UNDER THESE CIRCUMSTANCES, REIMBURSEMENT OF THE WHOLE SUM OF $415 IS NOT ALLOWABLE. WE NEED NOT DECIDE WHETHER THE CHANGES IN THE REAL ESTATE CONTRACT SUGGESTED AND MADE BY MR. MRAVCA'S ATTORNEY CONSTITUTE "PREPARATION" UNDER SECTION 4.2C BECAUSE ALL SERVICES HAVE BEEN INCLUDED IN AN ALL INCLUSIVE "LEGAL FEE" AND, AS STATED ABOVE, SECTION 4.2C MAKES NO PROVISION FOR PAYMENT OF AN ALL INCLUSIVE "LEGAL FEE".

THEREFORE, ON THE BASIS OF THE PRESENT RECORD NO PART OF THE $415 PAID TO MR. MRAVCA WAS PROPER AND HE SHOULD BE REQUIRED TO REFUND SUCH AMOUNT TO YOUR AGENCY.