B-168952, MAR. 16, 1970

B-168952: Mar 16, 1970

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ASSUMED EXISTING LOAN ON PROPERTY IS NOT ENTITLED TO REIMBURSEMENT FOR TITLE EXAMINATION AND TITLE CERTIFICATE SINCE SEC. 4.2C OF BOB CIR. A-56 ONLY AUTHORIZES REIMBURSEMENT OF COSTS OF SEARCHING TITLE WHEN REQUIRED FOR LEGAL AND FINANCING PURPOSES AND RECORD SHOWS IT IS NOT CUSTOMARY IN VIRGINIA FOR LENDER TO REQUIRE SUCH SEARCH WHEN BUYER ASSUMES LOAN PREVIOUSLY MADE ON PROPERTY. THAT PART OF YOUR CLAIM MENTIONED ABOVE WAS DISALLOWED SINCE IT WAS NOT THE CUSTOM IN VIRGINIA FOR THE LENDER TO REQUIRE A TITLE EXAMINATION UNLESS A NEW LOAN IS BEING PLACED ON THE PROPERTY. TO THE EXTENT SUCH COSTS HAVE NOT BEEN INCLUDED IN BROKERS' OR SIMILAR SERVICES FOR WHICH REIMBURSEMENT IS CLAIMED UNDER OTHER CATEGORIES.

B-168952, MAR. 16, 1970

OFFICERS AND EMPLOYEES--TRANSFERS--RELOCATION EXPENSES--HOUSE PURCHASE- TITLE EXAMINATION FEE, ETC. EMPLOYEE WHO PURCHASED HOME IN FAIRFAX, V.A; INCIDENT TO TRANSFER OF DUTY STATION FROM BUFFALO, N.Y. TO WASHINGTON, D.C. AND ASSUMED EXISTING LOAN ON PROPERTY IS NOT ENTITLED TO REIMBURSEMENT FOR TITLE EXAMINATION AND TITLE CERTIFICATE SINCE SEC. 4.2C OF BOB CIR. NO. A-56 ONLY AUTHORIZES REIMBURSEMENT OF COSTS OF SEARCHING TITLE WHEN REQUIRED FOR LEGAL AND FINANCING PURPOSES AND RECORD SHOWS IT IS NOT CUSTOMARY IN VIRGINIA FOR LENDER TO REQUIRE SUCH SEARCH WHEN BUYER ASSUMES LOAN PREVIOUSLY MADE ON PROPERTY.

TO MR. ALBERT J. VOLK:

THIS REFERS TO YOUR LETTER OF DECEMBER 17, 1969, REQUESTING RECONSIDERATION OF THAT PART OF OUR SETTLEMENT OF DECEMBER 11, 1969, WHICH DISALLOWED REIMBURSEMENT FOR THE COST OF A TITLE EXAMINATION ($280) AND A TITLE CERTIFICATE ($25) INCURRED IN CONNECTION WITH THE PURCHASE OF A RESIDENCE INCIDENT TO A TRANSFER OF DUTY STATION FROM BUFFALO, NEW YORK, TO WASHINGTON, D.C.

THAT PART OF YOUR CLAIM MENTIONED ABOVE WAS DISALLOWED SINCE IT WAS NOT THE CUSTOM IN VIRGINIA FOR THE LENDER TO REQUIRE A TITLE EXAMINATION UNLESS A NEW LOAN IS BEING PLACED ON THE PROPERTY.

THE SETTLEMENT STATEMENT DATED AUGUST 1, 1969, ON FILE SHOWS THAT RELATIVE TO THE PURCHASE OF YOUR RESIDENCE IN FAIRFAX COUNTY YOU ASSUMED THE FIRST TRUST LOAN IN THE AMOUNT OF $24,327.76. INCIDENT TO ASSUMING THIS FIRST TRUST, YOU HAD A TITLE EXAMINATION MADE. SECTION 4.2C OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, REVISED OCTOBER 12, 1966, IN EFFECT AT THE TIME OF YOUR PURCHASE PROVIDED IN PART AS FOLLOWS:

"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, CUSTOMARY COSTS OF SEARCHING TITLE, PREPARING CONVEYANCES AND OTHER INSTRUMENTS * * * WHEN REQUIRED FOR LEGAL OR FINANCING PURPOSES * * * MAY BE REIMBURSED * * * WITH RESPECT TO * * * PURCHASE OF A DWELLING AT THE NEW OFFICIAL STATION * * *." (UNDERSCORING SUPPLIED.)

WHILE IT MAY BE CUSTOMARY FOR A LENDER TO REQUIRE A TITLE SEARCH WHEN A NEW LOAN IS MADE, THE RECORD SHOWS THAT IT IS NOT THE CUSTOM IN VIRGINIA FOR THE LENDER TO REQUIRE SUCH A SEARCH WHEN THE BUYER ASSUMES THE LOAN PREVIOUSLY MADE ON THE PROPERTY SUCH AS IN YOUR CASE.

THUS, IT MUST BE HELD THAT THE REGULATION PRECLUDES REIMBURSEMENT OF THE TITLE CHARGES CLAIMED. THE ACTION TAKEN IN OUR SETTLEMENT OF DECEMBER 11, 1969, IN DISALLOWING YOUR CLAIM IS SUSTAINED.