B-175374, APR 12, 1972

B-175374: Apr 12, 1972

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THE COST OF OBTAINING OWNER'S TITLE INSURANCE IS A PERSONAL EXPENSE FOR THE OWNER'S OWN PROTECTION AND IS NOT REIMBURSABLE. SPERLING: REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 28. ZANCANARO WAS AUTHORIZED A CHANGE OF OFFICIAL DUTY STATION FROM PHOENIX. THE SETTLEMENT FOR THE ABOVE TRANSACTION WAS CONSUMMATED ON JANUARY 10. ZANCANARO HAS NOW SUBMITTED FOR PAYMENT A VOUCHER IN THE AMOUNT OF $578.61 WHICH REPRESENTS THE SUM OF THE FOLLOWING CHARGES WHICH WERE ASSESSED AT THE TIME OF SETTLEMENT: 1. 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.

B-175374, APR 12, 1972

CIVILIAN EMPLOYEE - CHANGE OF OFFICIAL STATION - REAL ESTATE EXPENSES - REIMBURSEMENT CONCERNING THE CLAIM OF JOHN C. ZANCANARO FOR REIMBURSEMENT OF CERTAIN REAL ESTATE EXPENSES INCURRED INCIDENT TO A CHANGE OF STATION FROM PHOENIX, ARIZONA TO SAN FRANCISCO, CALIF., AS AN EMPLOYEE OF THE FEDERAL MEDIATION AND CONCILIATION SERVICE. MR. ZANCANARO'S CLAIM FOR REIMBURSEMENT OF RECORDING AND ESCROW FEES, LENDERS TITLE POLICY, AND ENDORSEMENTS, APPEAR BOTH REASONABLE AND NECESSARY UNDER THE PROVISIONS OF SECTION 4.2C, OMB CIRCULAR NO. A-56. HOWEVER, THE COST OF OBTAINING OWNER'S TITLE INSURANCE IS A PERSONAL EXPENSE FOR THE OWNER'S OWN PROTECTION AND IS NOT REIMBURSABLE. THE VOUCHER MAY BE CERTIFIED FOR PAYMENT IN ACCORDANCE WITH THE FOREGOING.

TO MISS ROSE M. SPERLING:

REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 28, 1972, WITH ENCLOSURES, REQUESTING OUR DECISION AS TO WHETHER THE ENCLOSED VOUCHER IN THE AMOUNT OF $578.61 IN FAVOR OF MR. JOHN C. ZANCANARO, AN EMPLOYEE OF THE FEDERAL MEDIATION AND CONCILIATION SERVICE, MAY BE CERTIFIED FOR PAYMENT IN VIEW OF THE CIRCUMSTANCES HEREINAFTER DESCRIBED.

THE RECORD INDICATES THAT UNDER TRAVEL AUTHORIZATION NO. 0-71-23, DATED NOVEMBER 3, 1970, MR. ZANCANARO WAS AUTHORIZED A CHANGE OF OFFICIAL DUTY STATION FROM PHOENIX, ARIZONA, TO SAN FRANCISCO, CALIFORNIA. HE REPORTED TO THE NEW DUTY STATION ON JANUARY 11, 1971. INCIDENT TO SUCH TRANSFER ON JANUARY 6, 1972, MR. ZANCANARO CONTRACTED FOR THE PURCHASE OF A LOT AND THE CONSTRUCTION OF A RESIDENCE THEREON TO SERVE AS HIS HOME AT THE NEW DUTY STATION. THE SETTLEMENT FOR THE ABOVE TRANSACTION WAS CONSUMMATED ON JANUARY 10, 1972.

MR. ZANCANARO HAS NOW SUBMITTED FOR PAYMENT A VOUCHER IN THE AMOUNT OF $578.61 WHICH REPRESENTS THE SUM OF THE FOLLOWING CHARGES WHICH WERE ASSESSED AT THE TIME OF SETTLEMENT:

1. OWNERS TITLE INSURANCE$240.19

2. RECORDING FEES 10.40

3. ESCROW FEES 141.85

4. LENDERS TITLE POLICY 112.09

5. LENDERS TITLE ENDORSEMENT 102.5 44.45

6. LENDERS TITLE ENDORSEMENT 102.2 29.63

$578.61

THE CONTROLLING REGULATION, OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR NO. A-56, REVISED JUNE 26, 1969, SECTION 4.2C, PROVIDES 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."

THE ABOVE-REFERENCED OMB CIRCULAR ALSO PROVIDES IN PERTINENT PART IN SECTION 4.2D THAT:

" *** THE COST OF A MORTGAGE TITLE POLICY PAID FOR BY THE EMPLOYEE ON A RESIDENCE PURCHASED BY HIM IS REIMBURSABLE BUT COSTS OF OTHER TYPES OF INSURANCE PAID FOR BY HIM, SUCH AS AN OWNER'S TITLE POLICY, A 'RECORD TITLE' POLICY, MORTGAGE INSURANCE, AND INSURANCE AGAINST DAMAGE OR LOSS OF PROPERTY, ARE NOT REIMBURSABLE ITEMS OF EXPENSE *** .

"IN CASES INVOLVING CONSTRUCTION OF A RESIDENCE, REIMBURSEMENT OF EXPENSES WOULD INCLUDE THOSE ITEMS OF EXPENSE WHICH ARE COMPARABLE TO EXPENSES THAT ARE REIMBURSABLE IN CONNECTION WITH THE PURCHASE OF EXISTING RESIDENCES AND WILL NOT INCLUDE EXPENSES WHICH RESULT FROM CONSTRUCTION."

WE HAVE BEEN INFORMALLY ADVISED BY MR. WILLIAM A. FRENCH, ESCROW OFFICER OF THE VALLEY TITLE COMPANY, THE ENTERPRISE WHICH HANDLED THE TRANSACTION HERE INVOLVED, THAT NONE OF THE ENUMERATED ITEMS IN MR. ZANCANARO'S CLAIM ARE UNIQUE TO CONSTRUCTION CONTRACTS.

TURNING FIRST TO ITEM 2, REPRESENTING A RECORDING FEE CHARGE OF $10.40, IT IS NOTED THAT SUCH COST IS SPECIFICALLY REIMBURSABLE UNDER SECTION 4.2C. REIMBURSEMENT FOR THIS FEE MAY THEREFORE PROPERLY BE MADE.

AS TO ITEM 3 (ESCROW FEE OF $141.85), WE HAVE RULED THAT SUCH CHARGES ARE REIMBURSABLE WHEN THERE IS NO INDICATION THAT ANY PART THEREOF IS RELATED TO THE EXTENSION OF CREDIT. B-170007, JULY 13, 1970. CF. B 162738, JANUARY 10, 1968, COPIES HEREWITH. WE THUS SEE NO BASIS FOR OBJECTION TO REIMBURSEMENT FOR THE ESCROW FEE.

REFERRING NOW TO ITEM 1, REPRESENTING THE COST OF AN OWNER'S TITLE INSURANCE POLICY ($240.19), WE NOTE THAT SUCH A POLICY IS FOR THE PURCHASER'S OWN PROTECTION. THE COST OF THE PREMIUM FOR SUCH INSURANCE IS TO BE REGARDED AS A PERSONAL EXPENSE TO THE EMPLOYEE-PURCHASER, INCURRED AT HIS ELECTION AND NOT NECESSARILY ESSENTIAL TO CONSUMMATION OF THE REAL ESTATE TRANSACTION. REIMBURSEMENT OF THIS ITEM WOULD BE SPECIFICALLY PRECLUDED BY SECTION 4.2D OF THE CIRCULAR, AS QUOTED ABOVE. SEE ALSO B- 161459, OCTOBER 21, 1970, COPY ENCLOSED.

WE HAVE BEEN ADVISED BY MR. FRENCH THAT ITEM 4, REPRESENTING AN ASSESSMENT OF $112.09 FOR A LENDER'S TITLE POLICY, WAS INCURRED BY MR. ZANCANARO FOR THE PROTECTION OF THE MORTGAGEE AS A NECESSARY REQUIREMENT TO OBTAINING A LOAN. AS SUCH IT IS REIMBURSABLE UNDER SECTION 4.2D OF CIRCULAR NO. A-56. SEE ALSO B-164867, SEPTEMBER 4, 1968, COPY ENCLOSED.

FINALLY, WITH RESPECT TO ITEMS 5 AND 6 ($44.45 AND $29.63, RESPECTIVELY) FOR LENDER'S TITLE ENDORSEMENTS, WE HAVE BEEN ADVISED THAT SUCH ENDORSEMENTS INVOLVED SERVICES WHICH ALSO WERE NECESSARY AS A PREREQUISITE TO MR. ZANCANARO'S MORTGAGE BEING APPROVED. FOR EXAMPLE, THE CHARGE OF $44.45 FOR THE LENDER'S TITLE ENDORSEMENT 102.5 WAS FOR A STATEMENT THAT AN INSPECTION OF THE PROPERTY HAD BEEN MADE SO AS TO ASCERTAIN WHETHER THERE EXISTED ANY ENCROACHMENTS OR EASEMENTS ON THE REAL ESTATE WHICH MIGHT HAVE A BEARING ON THE STATE OF THE TITLE. IT IS THEREFORE OUR VIEW THAT SUCH CHARGES ARE REIMBURSABLE UNDER SECTION 4.2C QUOTED ABOVE.

ACCORDINGLY, THE VOUCHER AND SUPPORTING PAPERS ARE RETURNED HEREWITH AND MAY BE CERTIFIED FOR PAYMENT IN ACCORDANCE WITH THE FOREGOING.