B-181129, AUG 19, 1974

B-181129: Aug 19, 1974

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

IS NOT AUTHORIZED SINCE 5 U.S.C. 5724AA)(4) AND SECTION 2-6.2A OF THE FEDERAL TRAVEL REGULATIONS. LIMIT REIMBURSEMENT OF BROKERAGE FEE TO THAT CUSTOMARILY CHARGED FOR SALE OF RESIDENCE IN LOCALITY WHERE RESIDENCE IS SITUATED. AN ADVANCE DECISION WAS REQUESTED AS TO WHETHER MR. THE QUESTIONED ITEMS ARE A 2 1/2 PERCENT GUARANTEE PURCHASE FEE. WHICH THE SETTLEMENT SHEET INDICATES WERE DEDUCTED FROM THE PROCEEDS DUE THE EMPLOYEE IN ADDITION TO THE DEDUCTION OF THE 6 PERCENT COMMISSION CUSTOMARILY CHARGED IN THE LOCALITY FOR THE SALE OF A RESIDENCE. THE RECORD INDICATES THE PROPERTY WAS SOLD IN ACCORDANCE WITH A GUARANTEE TO PURCHASE AGREEMENT. UNDER THE TERMS OF WHICH THE PROPERTY WAS TO BE SOLD TO THE BROKER AT A SPECIFIED PRICE IF NOT SOLD TO A THIRD PARTY BY JANUARY 31.

B-181129, AUG 19, 1974

TRANSFERRED EMPLOYEE AGREED TO PAY BROKER CUSTOMARY FEE INCIDENT TO SALE OF RESIDENCE AND ENTERED INTO GUARANTEE TO PURCHASE PLAN AGREEMENT WHERBY THE BROKER WOULD PURCHASE THE RESIDENCE IF NOT SOLD BY CERTAIN DATE. REIMBURSEMENT OF 2 1/2 PERCENT FEE AND $125 FOR ADDITIONAL COST OF RESALE CHARGED BY BROKER. WHO PURCHASED RESIDENCE UNDER THE PLAN, IS NOT AUTHORIZED SINCE 5 U.S.C. 5724AA)(4) AND SECTION 2-6.2A OF THE FEDERAL TRAVEL REGULATIONS, FPMR 101-7, LIMIT REIMBURSEMENT OF BROKERAGE FEE TO THAT CUSTOMARILY CHARGED FOR SALE OF RESIDENCE IN LOCALITY WHERE RESIDENCE IS SITUATED.

ROBERT W. FREUNDT - BROKERAGE FEES:

BY LETTER OF APRIL 22, 1974, FROM A CERTIFYING OFFICER OF THE DEPARTMENT OF THE INTERIOR, AN ADVANCE DECISION WAS REQUESTED AS TO WHETHER MR. ROBERT W. FREUNDT, A NATIONAL PARK SERVICE EMPLOYEE, MAY BE REIMBURSED FOR A GUARANTEED SALES FEE AND THE ADDITIONAL COST OF A RESALE FEE BESIDES A BROKERAGE FEE INCURRED INCIDENT TO THE SALE OF HIS RESIDENCE UPON PERMANENT CHANGE OF STATION IN JANUARY 1974.

THE QUESTIONED ITEMS ARE A 2 1/2 PERCENT GUARANTEE PURCHASE FEE, $887.50, AND THE SUM OF $125 FOR ADDITIONAL COST OF RESALE, WHICH THE SETTLEMENT SHEET INDICATES WERE DEDUCTED FROM THE PROCEEDS DUE THE EMPLOYEE IN ADDITION TO THE DEDUCTION OF THE 6 PERCENT COMMISSION CUSTOMARILY CHARGED IN THE LOCALITY FOR THE SALE OF A RESIDENCE. THE RECORD INDICATES THE PROPERTY WAS SOLD IN ACCORDANCE WITH A GUARANTEE TO PURCHASE AGREEMENT, UNDER THE TERMS OF WHICH THE PROPERTY WAS TO BE SOLD TO THE BROKER AT A SPECIFIED PRICE IF NOT SOLD TO A THIRD PARTY BY JANUARY 31, 1974--THE APPROXIMATE DATE ON WHICH THE EMPLOYEE WAS TO REPORT TO HIS NEW STATION. PROVISION WAS MADE IN THE AGREEMENT FOR THE USUAL 6 PERCENT COMMISSION AND FOR THE ADDITIONAL FEES BECAUSE OF THE RISK ASSUMED BY THE BROKER AND BECAUSE OF THE SPECIAL SERVICES OFFERED IN THE GUARANTEED SALES PLAN.

5 U.S.C. 5724AA)(4) PROVIDES THAT "REIMBURSEMENT FOR BROKERAGE FEES ON THE SALE OF THE RESIDENCE *** MAY NOT EXCEED THOSE CUSTOMARILY CHARGED IN THE LOCALITY WHERE THE RESIDENCE IS LOCATED." SECTION 2 6.2A OF THE FEDERAL TRAVEL REGULATIONS EFFECTIVE MAY 1. 1973, FPMR 101 7, CONTAINS A SIMILAR RESTRICTION. WE HAVE HELD THAT UNDER SUCH PROVISIONS, BROKERAGE FEES ARE NOT REIMBURSABLE TO THE EXTENT THEY EXCEED THE FEE NORMALLY CHARGED IN THE AREA WHERE THE RESIDENCE IS SITUATED EVEN THOUGH HE HIGHER FEES WERE CHARGED TO EXPEDITE THE SALE OF THE RESIDENCE. B-165200, SEPTEMBER 23, 1968, AND B-166764, MAY 21, 1969.

SINCE THE RECORD DOES NOT ESTABLISH THAT A COMMISSION RATE OVER 6 PERCENT IS CUSTOMARILY PAID IN THE AREA WHERE THE RESIDENCE WAS LOCATED, AS IS REQUIRED BY THE ABOVE STATUTE AND REGULATION, THE ADDITIONAL FEES PAID TO THE BROKER FOR SELLING SERVICES ARE NOT REIMBURSABLE. THEREFORE, THE ADDITIONAL FEES ON THE EMPLOYEE'S VOUCHER MAY NOT BE CERTIFIED FOR PAYMENT.