B-168156, DEC. 11, 1969

B-168156: Dec 11, 1969

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EFFECTIVE DATE- DATE EXPENSES WERE INCURRED BECAUSE DATE REAL ESTATE EXPENSES WERE INCURRED (AUG. 11. IS CONTROLLING. IN WHICH FORMER PROVISION THAT SAME TYPE OF COSTS ARE NOT REIMBURSABLE IN CONNECTION WITH SALE OF RESIDENCE AT OLD DUTY STATION AND PURCHASE OF RESIDENCE AT NEW DUTY STATION WAS DELETED. FARRALL: THIS WILL REFER TO YOUR LETTER OF OCTOBER 16. (2) WHETHER CERTAIN SPECIFIC ITEMS CLAIMED AND IDENTIFIED AS "1/2 CLOSING" AND "TITLE OPINION" ARE ALLOWABLE. DEFINING REIMBURSABLE AND NONREIMBURSABLE ITEMS OF REAL ESTATE TRANSACTION EXPENSES INCURRED INCIDENT TO TRANSFER WAS AMENDED BY THE JUNE 26 REVISION TO DELETE. THE FORMER PROVISION THAT THE "SAME TYPES OF COSTS ARE NOT REIMBURSABLE" BOTH IN CONNECTION WITH THE SALE OF A RESIDENCE AT THE OLD STATION AND PURCHASE OF A RESIDENCE AT THE NEW STATION.

B-168156, DEC. 11, 1969

OFFICERS AND EMPLOYEES--TRANSFERS--RELOCATION EXPENSES--EFFECTIVE DATE- DATE EXPENSES WERE INCURRED BECAUSE DATE REAL ESTATE EXPENSES WERE INCURRED (AUG. 11, 1969) IN CONNECTION WITH TRANSFER FROM SACRAMENTO, CALIF. TO LOVELAND, COLO; IS CONTROLLING, RATHER THAN EFFECTIVE DATE OF TRANSFER (JUNE 16, 1969), UNDER REVISED PROVISIONS OF BUREAU OF THE BUDGET CIR. NO. A-56, JUNE 26, 1969, IN WHICH FORMER PROVISION THAT SAME TYPE OF COSTS ARE NOT REIMBURSABLE IN CONNECTION WITH SALE OF RESIDENCE AT OLD DUTY STATION AND PURCHASE OF RESIDENCE AT NEW DUTY STATION WAS DELETED, EMPLOYEE MAY BE REIMBURSED FOR REAL ESTATE EXPENSES INCURRED, INCLUDING RECORDING FEES FOR DEED AND DEED OF TRUST, 1/2 PREPARATION OF CONTRACT, TITLE OPINION AND DOCUMENTARY STAMPS BUT NOT FOR "1/2 CLOSING" SINCE IT REFERS TO ATTORNEY'S FEE FOR REPRESENTATION AT SETTLEMENT.

TO MR. HAROLD J. FARRALL:

THIS WILL REFER TO YOUR LETTER OF OCTOBER 16, 1969, REQUESTING A DECISION AS TO THE PROPRIETY OF CERTIFYING FOR PAYMENT A RECLAIM VOUCHER PRESENTED BY MR. JAMES E. STOKES FOR CERTAIN ITEMS DISALLOWED ON HIS ORIGINAL VOUCHER CLAIMING RELOCATION EXPENSES IN CONNECTION WITH HIS TRANSFER, EFFECTIVE JUNE 16, 1969, FROM SACRAMENTO, CALIFORNIA, TO LOVELAND, COLORADO.

THE ITEMS IN QUESTION TOTAL $176.83, CLAIMED AS "LEGAL AND RELATED COSTS" IN CONNECTION WITH THE PURCHASE OF A NEW RESIDENCE AT THE EMPLOYEE'S NEW OFFICIAL STATION. YOUR LETTER RAISES QUESTIONS AS TO (1) WHETHER REIMBURSEMENT OF THIS EXPENSE SHOULD BE CONSIDERED UNDER THE PROVISIONS OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, AS REVISED JUNE 26, 1969, OR, SINCE THE TRANSFER OCCURRED PRIOR TO JUNE 26, THE PROVISIONS OF THE CIRCULAR EFFECTIVE BEFORE ITS REVISION SHOULD APPLY, AND (2) WHETHER CERTAIN SPECIFIC ITEMS CLAIMED AND IDENTIFIED AS "1/2 CLOSING" AND "TITLE OPINION" ARE ALLOWABLE.

SUBSECTION 4.2 OF CIRCULAR NO. A-56, AS REVISED OCTOBER 12, 1966, DEFINING REIMBURSABLE AND NONREIMBURSABLE ITEMS OF REAL ESTATE TRANSACTION EXPENSES INCURRED INCIDENT TO TRANSFER WAS AMENDED BY THE JUNE 26 REVISION TO DELETE, IN GENERAL, THE FORMER PROVISION THAT THE "SAME TYPES OF COSTS ARE NOT REIMBURSABLE" BOTH IN CONNECTION WITH THE SALE OF A RESIDENCE AT THE OLD STATION AND PURCHASE OF A RESIDENCE AT THE NEW STATION. SUBSECTION 4.2C WAS FURTHER AMENDED TO ALLOW, SPECIFICALLY, FOR REIMBURSEMENT OF THE COST OF A TITLE OPINION IN CONNECTION WITH THE PURCHASE OF A RESIDENCE.

THIS OFFICE HAS TAKEN THE POSITION THAT FOR PURPOSES OF REIMBURSEMENT OF REAL ESTATE TRANSACTION EXPENSES ALLOWED UNDER THE PROVISIONS OF PUBLIC LAW 89-516 WHERE THE DATE OF TRANSFER PRECEDED THE EFFECTIVE DATE OF THE JUNE 26, 1969 REVISION OF CIRCULAR NO. A-56 BUT THE EXPENSE IS INCURRED SUBSEQUENT TO THAT DATE, THE DATE THE EXPENSE IS INCURRED, IS CONTROLLING. B-168011, OCTOBER 24, 1969, COPY ENCLOSED. IN MR. STOKES' CASE THE EXPENSES CLAIMED INCIDENT TO THE SALE OF HIS OLD RESIDENCE AND PURCHASE OF HIS NEW RESIDENCE WERE INCURRED AT THE TIMES OF SETTLEMENT, AUGUST 6, 1969, AND AUGUST 11, 1969, RESPECTIVELY. 47 COMP. GEN. 582. SINCE THE JUNE 26 REVISION OF CIRCULAR NO. A-56 WAS THEN IN EFFECT, IT IS FOR APPLICATION.

AS TO THE SPECIFIC ITEMS CLAIMED, WE NOTE THE ADMINISTRATIVE DISALLOWANCE OF AN ITEM OF $20 IDENTIFIED AS "DEED OF TRUST AND NOTE," PRESUMABLY ON THE BASIS OF ADVICE THAT THIS IS A CUSTOMARY COST TO THE SELLER OF REAL ESTATE IN THE AREA. AS TO THE OTHER ITEMS CLAIMED WE WOULD ADVISE AS FOLLOWS:

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

"C. LEGAL AND RELATED COSTS. TO THE EXTENT SUCH COSTS HAVE NOT BEEN INCLUDED IN BROKERS' OR SIMILAR SERVICES FOR WHICH REIMBURSEMENT IS CLAIMED UNDER OTHER CATEGORIES, THE FOLLOWING EXPENSES ARE REIMBURSABLE WITH RESPECT TO THE SALE AND PURCHASE OF RESIDENCES IF THEY ARE CUSTOMARILY PAID BY THE SELLER OF A RESIDENCE AT THE OLD OFFICIAL STATION OR IF CUSTOMARILY PAID BY THE PURCHASER OF A RESIDENCE AT THE NEW OFFICIAL STATION, TO THE EXTENT THEY DO NOT EXCEED AMOUNTS CUSTOMARILY CHARGED IN THE LOCALITY OF THE RESIDENCE; COSTS OF (1) SEARCHING TITLE, PREPARING ABSTRACT, AND LEGAL FEES FOR A TITLE OPINION, OR (2) WHERE CUSTOMARILY FURNISHED BY THE SELLER, THE COST OF A TITLE INSURANCE POLICY; COSTS OF PREPARING CONVEYANCES, OTHER INSTRUMENTS, AND CONTRACTS; RELATED NOTARY FEES AND RECORDING FEES; COSTS OF MAKING SURVEYS, PREPARING DRAWINGS OR PLATS WHEN REQUIRED FOR LEGAL OR FINANCING PURPOSES; AND SIMILAR EXPENSES. COSTS OF LITIGATION ARE NOT REIMBURSABLE.'

THE ITEMS CLAIMED, IN ADDITION TO THAT DISALLOWED ADMINISTRATIVELY, ARE IDENTIFIED AS: ,RECORDING FEES FOR DEED; RECORDING DEED OF TRUST; ABSTRACT ENTRY/IES); 1/2 CONTRACT; TITLE PINION; 1/2 CLOSING; DOCUMENTARY STAMPS.' NO EXPLANATION IS GIVEN OF THE ITEM DESIGNATED AS "1/2 CONTRACT," HOWEVER, IT IS ASSUMED THIS MAY BE ATTRIBUTABLE TO THE PURCHASER'S LIABILITY FOR ONE-HALF THE COST OF PREPARING A SALES CONTRACT, SINCE THE SAME FEE APPEARS AMONG ITEMS SHOWN AS ,SELLER'S EXPENSES.' ALL OF SUCH FEES EXCEPT FOR "1/2 CLOSING" APPEAR TO BE REIMBURSABLE ASSUMING OF COURSE THAT THEY ARE FEES CUSTOMARILY PAID BY THE PURCHASER.

AS FOR THE ITEM IN THE AMOUNT OF $62.50 FOR "1/2 CLOSING" WE ASSUME THIS REFERS TO A FEE FOR REPRESENTATION BY ATTORNEYS AT THE CLOSING OF THE REAL ESTATE TRANSACTION. DECISIONS OF THIS OFFICE HAVE SPECIFICALLY DISALLOWED SUCH FEES. B-163203, MARCH 24, 1969; B-163690, MARCH 29, 1968, AND B- 164991, AUGUST 28, 1968, COPIES ENCLOSED.

THE VOUCHER, HEREWITH RETURNED WITH ATTACHMENTS, MAY BE CERTIFIED IN ACCORDANCE WITH THE FOREGOING.