B-176052, JUL 26, 1972

B-176052: Jul 26, 1972

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PROVIDES THAT CERTAIN REAL ESTATE EXPENSES MAY BE REIMBURSED IF THEY ARE CUSTOMARILY PAID BY THE SELLER AT THE OLD OFFICIAL STATION. SURVEY CHARGES ARE NORMALLY PAID BY THE PURCHASER. NO REFUND IS ALLOWABLE FOR THESE EXPENSES. THE APPRAISAL CHARGE IS NOT REIMBURSABLE BECAUSE IT. IS NORMALLY PAID BY THE PURCHASER. THE INSPECTION FEE IS NOT REIMBURSABLE BECAUSE IT IS NOT A CUSTOMARY CHARGE. THE REMAINING CHARGES WERE PROPERLY DENIED AS NOT BEING PAYABLE UNDER CURRENT REGULATIONS. WHICH WERE FORWARDED TO OUR OFFICE FOR CONSIDERATION AS A CLAIM FOR REIMBURSEMENT OF THE FOLLOWING REAL ESTATE EXPENSES: 1. TO THE EXTENT SUCH COSTS HAVE NOT BEEN INCLUDED IN BROKERS' OR SIMILAR SERVICES FOR WHICH REIMBURSEMENT IS CLAIMED UNDER OTHER CATEGORIES.

B-176052, JUL 26, 1972

CIVILIAN PERSONNEL - SALE OF RESIDENCE - REAL ESTATE EXPENSES DECISION DENYING IN PART THE CLAIM OF CLIFFORD L. HARRISON, FOR REIMBURSEMENT OF REAL ESTATE EXPENSES INCURRED IN THE SALE OF A RESIDENCE. SECTION 4.2C OF OMB CIRCULAR NO. A-56, REVISED AUGUST 17, 1971, PROVIDES THAT CERTAIN REAL ESTATE EXPENSES MAY BE REIMBURSED IF THEY ARE CUSTOMARILY PAID BY THE SELLER AT THE OLD OFFICIAL STATION. SINCE, IN THE COBB COUNTY, GA., AREA THE TITLE FEE, TITLE POLICY, AND SURVEY CHARGES ARE NORMALLY PAID BY THE PURCHASER, NO REFUND IS ALLOWABLE FOR THESE EXPENSES. THE APPRAISAL CHARGE IS NOT REIMBURSABLE BECAUSE IT, TOO, IS NORMALLY PAID BY THE PURCHASER. THE INSPECTION FEE IS NOT REIMBURSABLE BECAUSE IT IS NOT A CUSTOMARY CHARGE. THE PHOTO FEE MAY BE REIMBURSED IN THE AMOUNT OF $10 AS PROVIDED IN SUBSECTION 4.2F OF CIRCULAR NO. A-56. THE REMAINING CHARGES WERE PROPERLY DENIED AS NOT BEING PAYABLE UNDER CURRENT REGULATIONS.

TO MR. CLIFFORD L. HARRISON:

WE REFER TO YOUR LETTERS OF MARCH 30, 1972, AND MAY 5, 1972, ADDRESSED TO SENATOR PROXMIRE, WHICH WERE FORWARDED TO OUR OFFICE FOR CONSIDERATION AS A CLAIM FOR REIMBURSEMENT OF THE FOLLOWING REAL ESTATE EXPENSES:

1. TITLE FEE (ATTORNEY'S OPINION) $215.00

2. TITLE POLICY 58.75

3. SURVEY 75.00

4. APPRAISAL FEE 40.00

5. PHOTO AND INSPECTION FEE 20.00

6. DISCLOSURE STATEMENT 25.00

7. TAX SERVICE FEE 15.00

WITH REGARD TO THE FIRST THREE ITEMS, SECTION 4.2C OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56, REVISED AUGUST 17, 1971, EFFECTIVE SEPTEMBER 1, 1971, 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 *** 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."

AS INDICATED BY MR. L. A. KALMAN'S LETTER OF MARCH 12, 1972, ONE OF THE ENCLOSURES WITH YOUR LETTERS, REIMBURSEMENT FOR THESE ITEMS WAS DENIED ON THE BASIS THAT SUCH CHARGES ARE CUSTOMARILY PAID BY THE PURCHASER IN THE STATE OF GEORGIA. YOUR EXCEPTION TO THIS FINDING IS APPARENTLY BASED UPON ADVICE RECEIVED FROM AN ATTORNEY AND REALTORS THAT SUCH CHARGES TO A SELLER ARE "NORMALLY REQUIRED."

WE HAVE BEEN ADVISED BY BOTH THE COBB COUNTY BOARD OF REALTORS AND THE ATLANTA AREA OFFICE OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT THAT IN THE COBB COUNTY AREA THE COSTS OF BOTH A TITLE FEE AND OF A TITLE POLICY ARE CUSTOMARILY CHARGEABLE TO THE PURCHASER. WE ARE ALSO ADVISED BY BOTH ORGANIZATIONS THAT WHILE A SURVEY CHARGE IS REQUIRED ON ANY NEW LOAN FOR THE PURPOSE OF SHOWING THAT THERE ARE NO BOUNDARY LINE OR TITLE DISPUTES THAT CHARGE IS CUSTOMARILY PAID BY THE PURCHASER.

SUBSECTION 4.2B OF CIRCULAR NO. A-56 PROVIDES THAT THE CUSTOMARY COST OF AN APPRAISAL, ITEM NO. 4, MAY BE REIMBURSED. WE ARE, HOWEVER, ADVISED BY THE BOARD OF REALTORS AND THE ATLANTA AREA OFFICE THAT WHERE, AS IN YOUR CASE, THE APPRAISAL IS MADE PURSUANT TO AN AGREEMENT FOR SALE FOR THE PURPOSE OF THE PURCHASER'S OBTAINING A LOAN, THE COST OF THE APPRAISAL FEE IS CUSTOMARILY PAID BY THE PURCHASER.

WITH REGARD TO THE INSPECTION FEE, WHICH IN PART CONSTITUTES ITEM NO. 5, WE ARE ADVISED THAT SUCH FEE HAS ONLY RECENTLY BEEN IMPOSED BY A NUMBER OF LENDING INSTITUTIONS AND IS NOT AS YET A CUSTOMARY CHARGE. THE FEDERAL HOUSING ADMINISTRATION'S SCHEDULE OF CLOSING COSTS FOR THE COBB COUNTY LISTS AS CUSTOMARY A PHOTO FEE OF $10 AND WE ARE ADVISED THAT IN THE CASE OF A VETERAN'S ADMINISTRATION (VA) LOAN THAT CHARGE IS CUSTOMARILY PAID BY THE SELLER. IT APPEARS FROM AN EXAMINATION OF THE AUGUST 15, 1971, CONTRACT OF SALE FOR YOUR ACWORTH RESIDENCE THAT A VA LOAN WAS OBTAINED BY THE PURCHASER. UNDER SUCH CIRCUMSTANCES, REIMBURSEMENT OF THE PHOTO FEE, NOT IN EXCESS OF THE $10 AMOUNT INDICATED TO BE CUSTOMARY, WOULD BE PROPER IN ACCORDANCE WITH SUBSECTION 4.2F OF CIRCULAR NO. A-56 WHICH PROVIDES:

"F. OTHER EXPENSES OF SALE AND PURCHASE OF RESIDENCES. INCIDENTAL CHARGES MADE FOR REQUIRED SERVICES IN SELLING AND PURCHASING RESIDENCES MAY BE REIMBURSABLE IF THEY ARE CUSTOMARILY PAID BY THE SELLER OF A RESIDENCE AT THE OLD OFFICIAL STATION *** TO THE EXTENT THEY DO NOT EXCEED AMOUNTS CUSTOMARILY CHARGED IN THE LOCALITY OF THE RESIDENCE."

THE FEE FOR A DISCLOSURE STATEMENT, ITEM NO. 6, IS A CHARGE TO THE SELLER IN THE ATLANTA AREA FOR THE PREPARATION OF PAPERS REQUIRED TO BE FURNISHED BY LENDING INSTITUTIONS UNDER THE TRUTH IN LENDING LAWS. SUCH FEE IS A FINANCE CHARGE AND ACCORDINGLY THE DISALLOWANCE OF THAT ITEM WAS PROPER. SEE SUBSECTION 4.2D OF CIRCULAR NO. A-56.

DISALLOWANCE OF THE TAX SERVICE CHARGE WAS PROPER AND WAS BASED ON OUR HOLDING IN 49 COMP. GEN. 483, 486 (1970).

IN VIEW OF THE FOREGOING A SETTLEMENT WILL BE ISSUED IN YOUR FAVOR IN THE AMOUNT OF $10 BY OUR TRANSPORTATION AND CLAIMS DIVISION. THE ADMINISTRATIVE DISALLOWANCE OF THE REMAINING ITEMS OF REAL ESTATE EXPENSE CLAIMED BY YOU WAS CORRECT AND THAT DISALLOWANCE IS HEREBY AFFIRMED.