B-168818, FEB. 9, 1970

B-168818: Feb 9, 1970

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EMPLOYEE WHO IS UNABLE TO CANCEL CONTRACT FOR PURCHASE OF HOME AFTER NOTICE OF TRANSFER AND WHO THEREFORE COMPLETES CONTRACT AND IMMEDIATELY SELLS PROPERTY IS NOT PRECLUDED FROM RECEIVING REIMBURSEMENT FOR SELLING EXPENSES ON BASIS THAT DWELLING WAS NOT EMPLOYEE'S ACTUAL RESIDENCE AT TIME OF TRANSFER. TO PURCHASE THE RESIDENCE AND WAS REQUIRED TO PUT DOWN A DEPOSIT EQUAL TO 10 PERCENT OF THE PURCHASE PRICE. HE WAS NOTIFIED OF HIS PERMANENT CHANGE OF STATION AND EXECUTED THE NECESSARY DOCUMENTS. UPON ADVICE OF HIS ATTORNEY THAT HE WAS BOUND TO COMPLETE THE CONTRACT. THE LEGAL ISSUE PRESENTED BY THE CASE IS WHETHER THE EXPENSES INCURRED BY MR. AS FOLLOWS: "(A) UNDER SUCH REGULATIONS AS THE PRESIDENT MAY PRESCRIBE * * * APPROPRIATIONS OR OTHER FUNDS AVAILABLE TO AN AGENCY FOR ADMINISTRATIVE EXPENSES ARE AVAILABLE FOR THE REIMBURSEMENT OF * * *: "(4) EXPENSES OF THE SALE OF THE RESIDENCE * * * OF THE EMPLOYEE AT THE OLD STATION AND PURCHASE OF A HOME AT THE NEW OFFICIAL STATION * * *" SECTION 4.1D OF CIRCULAR NO.

B-168818, FEB. 9, 1970

CIVIL PAY--TRANSFERS--REAL ESTATE EXPENSES--IMMEDIATE SALE DECISION TO CERTIFYING OFFICER OF UNITED STATES SECRET SERVICE, CONCERNING EXPENSES INCURRED BY TRANSFERRED EMPLOYEE INCIDENT TO SALE OF RESIDENCE AT OLD STATION. EMPLOYEE WHO IS UNABLE TO CANCEL CONTRACT FOR PURCHASE OF HOME AFTER NOTICE OF TRANSFER AND WHO THEREFORE COMPLETES CONTRACT AND IMMEDIATELY SELLS PROPERTY IS NOT PRECLUDED FROM RECEIVING REIMBURSEMENT FOR SELLING EXPENSES ON BASIS THAT DWELLING WAS NOT EMPLOYEE'S ACTUAL RESIDENCE AT TIME OF TRANSFER.

TO MR. F. C. LONG:

THIS REFERS TO YOUR LETTER OF JANUARY 16, 1970, WITH ENCLOSURES, REQUESTING AN ADVANCE DECISION CONCERNING THE PROPRIETY OF THE REIMBURSEMENT OF EXPENSES CLAIMED BY MR. MICHAEL D. MISKINIS, SPECIAL AGENT OF THE UNITED STATES SECRET SERVICE, IN THE SALE OF A RESIDENCE AT HIS OLD OFFICIAL STATION.

YOU SAY THAT MR. MISKINIS ENTERED INTO A CONTRACT ON MAY 12, 1969, TO PURCHASE THE RESIDENCE AND WAS REQUIRED TO PUT DOWN A DEPOSIT EQUAL TO 10 PERCENT OF THE PURCHASE PRICE. ON JULY 18, 1969, HE WAS NOTIFIED OF HIS PERMANENT CHANGE OF STATION AND EXECUTED THE NECESSARY DOCUMENTS. AT THIS TIME MR. MISKINIS INDICATED THAT DUE TO HIS TRANSFER HE EXPECTED THE DEPOSIT TO BE REFUNDED. HOWEVER, UPON ADVICE OF HIS ATTORNEY THAT HE WAS BOUND TO COMPLETE THE CONTRACT, MR. MISKINIS PURCHASED THE RESIDENCE ON AUGUST 15, 1969, AND IMMEDIATELY SOLD THE RESIDENCE ON AUGUST 20, 1969.

THE LEGAL ISSUE PRESENTED BY THE CASE IS WHETHER THE EXPENSES INCURRED BY MR. MISKINIS FALL WITHIN THE PURVIEW OF 5 U.S.C. 5724A AND THE IMPLEMENTING REGULATIONS PROMULGATED BY SECTION 4 OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, REVISED JUNE 26, 1969.

SO FAR AS PERTINENT HERE PARAGRAPH (A) OF 5 U.S.C. 5724A PROVIDES, IN PART, AS FOLLOWS:

"(A) UNDER SUCH REGULATIONS AS THE PRESIDENT MAY PRESCRIBE * * * APPROPRIATIONS OR OTHER FUNDS AVAILABLE TO AN AGENCY FOR ADMINISTRATIVE EXPENSES ARE AVAILABLE FOR THE REIMBURSEMENT OF * * *:

"(4) EXPENSES OF THE SALE OF THE RESIDENCE * * * OF THE EMPLOYEE AT THE OLD STATION AND PURCHASE OF A HOME AT THE NEW OFFICIAL STATION * * *"

SECTION 4.1D OF CIRCULAR NO. A-56 REQUIRES THAT THE DWELLING AT THE OLD OFFICIAL STATION BE THE EMPLOYEE'S ACTUAL RESIDENCE AT THE TIME HE WAS FIRST DEFINITELY INFORMED THAT HE WAS TO BE TRANSFERRED TO A NEW OFFICIAL STATION. ORDINARILY THAT REQUIREMENT WOULD APPEAR TO PRECLUDE ANY REIMBURSEMENT OF SELLING EXPENSES OF A HOUSE NOT USED AS A RESIDENCE. HOWEVER, OUR VIEW IS THAT THE REGULATION WAS NOT INTENDED FOR APPLICATION IN A SITUATION SUCH AS HERE. THAT IS, WHERE THE EMPLOYEE HAS IN GOOD FAITH ENTERED INTO A CONTRACT FOR THE PURCHASE OF A RESIDENCE AT HIS OLD DUTY STATION PRIOR TO RECEIVING HIS TRANSFER ORDER IS UNABLE TO CANCEL THE PURCHASE CONTRACT AND IS PRECLUDED FROM ESTABLISHING HIS RESIDENCE IN THE HOUSE BECAUSE OF A TRANSFER. SEE B-162274, DATED SEPTEMBER 11, 1967, COPY ENCLOSED. ACCORDINGLY, WE WOULD NOT OBJECT TO REIMBURSEMENT OF THE SELLING EXPENSES TO THE EXTENT THEY ARE OTHERWISE PROPER UNDER CIRCULAR NO. A 56.

ACTION ON THE VOUCHER WHICH IS RETURNED HEREWITH SHOULD BE TAKEN IN ACCORDANCE WITH THE FOREGOING.