B-171323, FEB 5, 1971

B-171323: Feb 5, 1971

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SINCE THE CLAIM FOR REIMBURSEMENT IN THIS CASE IS NOT BASED ON A LENDER REQUIREMENT BUT ON THE CUSTOM IN THE VIRGINIA AREA IT IS ALLOWED AND THE DECISION OF MARCH 16. B-168952 IS NO LONGER FOR APPLICATION. HAMPTON: FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 17. 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. COSTS OF LITIGATION ARE NOT REIMBURSABLE.".

B-171323, FEB 5, 1971

TRANSFERS - INCIDENTAL EXPENSES ALLOWING REIMBURSEMENT FOR EXPENSES INCURRED FOR THE TITLE EXAMINATION INCIDENT TO THE ASSUMPTION OF A LOAN ON A HOUSE PURCHASED INCIDENT TO THE TRANSFER OF AN EMPLOYEE OF THE CIVIL SERVICE COMMISSION TO ALEXANDRIA, VA. SINCE THE CLAIM FOR REIMBURSEMENT IN THIS CASE IS NOT BASED ON A LENDER REQUIREMENT BUT ON THE CUSTOM IN THE VIRGINIA AREA IT IS ALLOWED AND THE DECISION OF MARCH 16, 1970, B-168952 IS NO LONGER FOR APPLICATION.

TO MR. HAMPTON:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 17, 1970, REQUESTING OUR DECISION REGARDING THE PROPRIETY OF REIMBURSING MR. JAMES E. GORMAN, AN EMPLOYEE OF YOUR AGENCY, FOR EXPENSES INCURRED FOR TITLE EXAMINATION AND RELATED INSTRUMENTS OF CERTIFICATION OF CLEAR TITLE INCIDENT TO THE ASSUMPTION OF A LOAN ON A HOUSE PURCHASED IN CONNECTION WITH A TRANSFER OF STATION.

THE RECORD INDICATES THAT ON JULY 15, 1970, MR. GORMAN PURCHASED A HOME IN ALEXANDRIA, VIRGINIA, FOR $46,500 AND ASSUMED A FIRST TRUST IN THE AMOUNT OF $30,447.63. MR. GORMAN CLAIMS REIMBURSEMENT FOR $465, TITLE EXAMINATION AND PRELIMINARY CERTIFICATION, AND $25, PREPARATION OF TITLE INSURANCE PAPERS, CONTINUANCE OF TITLE AND FINAL CERTIFICATION. YOU PROPOSE TO APPROVE REIMBURSEMENT FOR THESE EXPENSES UNDER THE PROVISIONS OF SECTION 4.2C, BUREAU OF THE BUDGET CIRCULAR NO. A-56, REVISED BY TRANSMITTAL MEMORANDUM NO. 5, JUNE 26, 1969, WHICH READS 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, 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."

YOU REFER TO DECISION B-168952, MARCH 16, 1970, WHICH DENIED REIMBURSEMENT FOR CHARGES FOR A TITLE EXAMINATION ON THE GROUND THAT, WHILE IT IS CUSTOMARY FOR A LENDER TO REQUIRE A TITLE SEARCH WHEN A NEW LOAN IS MADE, IT IS NOT THE CUSTOM IN VIRGINIA FOR A LENDER TO REQUIRE A TITLE SEARCH WHEN THE PURCHASER ASSUMES THE LOAN PREVIOUSLY MADE ON THE PROPERTY. YOU BELIEVE THAT THE CITED DECISION IS NOT FOR APPLICATION IN THIS CASE SINCE CLAIM FOR REIMBURSEMENT IS NOT BASED ON A LENDER REQUIREMENT BUT ON THE CUSTOM IN THE AREA FOR LEGAL PURPOSES.

THE REGULATION CITED PROVIDES FOR REIMBURSEMENT OF THE COSTS OF SEARCHING TITLE, PREPARING ABSTRACT, AND LEGAL FEES IF THEY ARE CUSTOMARILY PAID BY THE PURCHASER OF A RESIDENCE AT THE NEW OFFICIAL STATION AND DO NOT EXCEED AMOUNTS CUSTOMARILY CHARGED IN THE LOCALITY OF THE RESIDENCE. REIMBURSEMENT IS NOT LIMITED BY ANY LENDER REQUIREMENT. THE RECORD INDICATES THAT IT IS CUSTOMARY IN VIRGINIA FOR A TITLE EXAMINATION TO BE MADE IN THE PURCHASE OF A HOME. THIS IS A PREREQUISITE AND PRIMARY CONDITION BY MOST ATTORNEYS WHEN HANDLING A REAL ESTATE PURCHASE WHETHER A PRIOR MORTGAGE IS TO BE ASSUMED, NEW FINANCING OBTAINED, OR NO FINANCING INCURRED. THE LOCAL FEDERAL HOUSING ADMINISTRATION OFFICE HAS ADVISED THAT THE CHARGES CLAIMED ARE IN ACCORDANCE WITH THE CUSTOMARY CHARGES IN THE AREA AND ARE USUALLY BORNE BY THE PURCHASER.

IN VIEW OF THE ABOVE WE AGREE THAT THE AMOUNTS CLAIMED BY MR. GORMAN MAY BE APPROVED FOR PAYMENT IF OTHERWISE PROPER. THE DECISION OF MARCH 16, 1970, B-168952, IS NO LONGER FOR APPLICATION.