B-172339, JUL 20, 1971

B-172339, JUL 20, 1971

CIVILIAN EMPLOYEE - CHANGE OF STATION - PURCHASE OF RESIDENCE DECISION DISALLOWING CLAIM OF MR. IAN G. WOLF, EMPLOYEE OF THE FAA, FOR REIMBURSEMENT OF $528.80, REPRESENTING CLOSING COSTS PAID BY HIM IN PURCHASING A HOME INCIDENT TO A CHANGE OF STATIONS. BECAUSE CLOSING COSTS, WHEN INCLUDED IN THE PURCHASE PRICE, MUST BE CONSIDERED PART OF THE PRICE OF THE REALTY, SUCH COSTS ARE NOT REIMBURSABLE.

TO MR. R. J. SCHULLERY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 25, 1971, AND ENCLOSURES, IN WHICH YOU REQUEST OUR DECISION AS TO THE PROPRIETY OF CERTIFYING FOR PAYMENT A RECLAIM VOUCHER IN THE AMOUNT OF $528.80 SUBMITTED BY MR. IAN G. WOLF, AN EMPLOYEE OF THE FEDERAL AVIATION ADMINISTRATION, REPRESENTING CLOSING COSTS ALLEGEDLY PAID BY HIM INCIDENT TO A CHANGE OF OFFICIAL STATION.

THE FACTS AND CIRCUMSTANCES GIVING RISE TO THE CLAIM ARE STATED IN YOUR LETTER AS FOLLOWS:

"TRAVEL ORDER NUMBER 2080-47, DATED 16 OCTOBER 1969 AUTHORIZED AN OFFICIAL CHANGE OF STATION FOR MR. WOLF FROM OLATHE, KANSAS, TO WASHINGTON, D.C. THE EMPLOYEE REPORTED TO HIS NEW DUTY STATION ON 22 DECEMBER 1969. ON 17 NOVEMBER 1970, MR. WOLF ENTERED INTO A SALES CONTRACT TO PURCHASE A RESIDENCE FROM LEVITT AND SONS, INCORPORATED. THE SALE WAS CLOSED ON 23 DECEMBER 1970. IT SHOULD BE NOTED THAT THE EMPLOYEE WAS OFFICIALLY GRANTED AN EXTENSION OF 7 CALENDAR DAYS FOR PURPOSES OF CLOSING.

"MR. WOLF'S ORIGINAL VOUCHER, DATED 6 JANUARY 1971, CLAIMED $286.70 AS CLOSING COSTS APPLICABLE TO THE PURCHASE OF THE RESIDENCE AT HIS NEW OFFICIAL STATION. *** "

YOU ALSO REFERRED TO A LETTER ADDRESSED TO YOUR AGENCY FROM THE UNIVERSAL FUNDING CORPORATION, A SUBSIDIARY OF LEVITT AND SONS, INCORPORATED, THROUGH WHICH FIRM MR. WOLF'S MORTGAGE LOAN WAS FINANCED. IN THAT LETTER IT IS STATED, IN PERTINENT PART, THAT:

"AT THE TIME OF CONTRACT SIGNING, MR. WOLF WAS REQUIRED TO DEPOSIT THE SUM OF $1,000.00 WHICH WAS PLACED IN THE PROPER ACCOUNT PENDING THE OFFICIAL SETTLEMENT.

"FOLLOWING SETTLEMENT, LEVITT & SONS, INC. PAID ON BEHALF OF THE PURCHASER, ALL OF THE REQUIRED FEES AND CHARGES, STATE AND LOCAL DOCUMENT TAX AT THE FAIRFAX COUNTY COURT HOUSE PRIOR TO RECORDING. THESE MONIES WERE PAID AT SETTLEMENT AND ARE NOT ITEMS WHICH ARE INCLUDED IN THE MORTGAGE OR PAID FOR OVER A PERIOD OF TIME. FULL CREDIT FOR THESE CHARGES ARE GIVEN TO THE PURCHASER.

"TITLE SEARCH $300.00

SURVEY 45.00

CREDIT REPORT7.50

RECORDING OF THE DEED 16.50

RECORDING TAX FOR DEED 73.42

RECORDING TAX FOR MORTGAGE 71.40

RECORDING OF THE MORTGAGE DOCUMENT 15.00

TOTAL $528.80"

THE CONTRACT OF PURCHASE DISCLOSES THAT THE PURCHASE PRICE OF THE PROPERTY IN QUESTION WAS $36,816 IN ADDITION TO $24 FOR STATE AND LOCAL TAXES. AT THE TIME HE SIGNED THE AFORE STATED CONTRACT, MR. WOLF PAID A DEPOSIT OF $1,000 AND ANOTHER $140 AT TIME OF SETTLEMENT. A BALANCE OF $35,700 REMAINED TO BE FINANCED UNDER THE TERMS OF THE MORTGAGE. THE CLOSING STATEMENT AND THE DISCLOSURE STATEMENT, FEDERAL TRUTH-IN LENDING ACT, WERE OF SIMILAR IMPORT.

OUR OFFICE HAS CONSISTENTLY HELD THAT THERE IS NO BASIS UNDER THE CONTROLLING LAW OR REGULATIONS FOR TREATING ANY PART OF THE SELLING PRICE OF A RESIDENCE AS OTHER THAN THE PRICE OF THE REALTY, IRRESPECTIVE OF THE VARIOUS ELEMENTS, I.E., CLOSING COSTS, THAT MIGHT BE CONSIDERED IN ESTABLISHING THAT PRICE. SEE B-171440, MARCH 3, 1971; B-168068, NOVEMBER 7, 1969; B-165841, JANUARY 22, 1969; B-163816, MAY 3, 1968; B-162835, DECEMBER 21, 1967; AND B-161110, APRIL 13, 1967; COPIES ENCLOSED. WOULD AGREE THAT WHERE CLOSING COSTS ARE IN FACT PAID BY THE PURCHASER AT CLOSING IT IS IMMATERIAL THAT HE MAY HAVE GIVEN THE REQUIRED AMOUNT TO THE SELLER WHO IN TURN ACTUALLY MADE PAYMENT OF THE VARIOUS COSTS ASSOCIATED WITH CLOSING OF THE SALE. SEE B-170661, SEPTEMBER 16, 1970, AND B-165678, FEBRUARY 5, 1969, COPIES HEREWITH.

HOWEVER, IN THE INSTANT CASE, THE CONTRACT OF PURCHASE, THE CLOSING STATEMENT, AND THE DISCLOSURE STATEMENT CLEARLY SHOW THAT THE AMOUNT ATTRIBUTED TO CLOSING COSTS WAS INCLUDED IN THE SELLING PRICE OF THE PROPERTY ON THE BASIS OF WHICH PRICE THE MORTGAGE WAS EXECUTED AND, FURTHER, THAT THE $1,140 DEPOSIT MADE BY THE CLAIMANT WAS MERELY A PERCENTAGE OF SUCH PURCHASE PRICE. THIS IS EVIDENCED BY THE FACT THAT THE AMOUNT TO BE FINANCED ($35,700) WAS NOT REDUCED BY THE AMOUNT OF THE VARIOUS COSTS INCURRED AT CLOSING.

IN VIEW OF THE FOREGOING, THE RECLAIM VOUCHER MAY NOT BE CERTIFIED FOR PAYMENT AND, ALONG WITH THE OTHER ATTACHMENTS SUBMITTED, IS RETURNED HEREWITH.