B-182203, JAN 16, 1975, 54 COMP GEN 597

B-182203: Jan 16, 1975

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THE ADMINISTRATIVE AGENCY SHOULD DETERMINE HOW MUCH OF THE LAND IS "REASONABLY RELATED TO THE RESIDENCE SITE" AS DIRECTED BY FEDERAL TRAVEL REGULATIONS (FPMR 101-7) PARAGRAPH 2-6.1F (MAY 1973) BY TAKING INTO CONSIDERATION ZONING LAWS. WHETHER THEY ARE PERCENTAGE DERIVATIVES OF THE PURCHASE/SALE PRICE OR FLAT FEES. OFFICERS AND EMPLOYEES - TRANSFERS - RELOCATION EXPENSES - PRO RATA EXPENSE REIMBURSEMENT - HOUSE PURCHASE OR SALE - DOUBTFUL CASES TO GAO WHERE EMPLOYEE PURCHASES OR SELLS LAND IN EXCESS OF THAT REASONABLY RELATED TO A RESIDENCE SITE AND THERE IS DOUBT AS TO THE PROPRIETY OF THE AGENCY PRORATION DETERMINATION UNDER FEDERAL TRAVEL REGULATIONS (FPMR 101- 7) PARAGRAPH 2-6.1F (MAY 1973) OR THE EMPLOYEE TAKES EXCEPTION TO THE AGENCY DETERMINATION.

B-182203, JAN 16, 1975, 54 COMP GEN 597

OFFICERS AND EMPLOYEES - TRANSFERS - RELOCATION EXPENSES - HOUSE PURCHASE - PRO RATA EXPENSE REIMBURSEMENT EMPLOYEE PURCHASED 43.003 ACRES OF LAND ON WHICH SHE LOCATED MOBILE HOME. THE ADMINISTRATIVE AGENCY SHOULD DETERMINE HOW MUCH OF THE LAND IS "REASONABLY RELATED TO THE RESIDENCE SITE" AS DIRECTED BY FEDERAL TRAVEL REGULATIONS (FPMR 101-7) PARAGRAPH 2-6.1F (MAY 1973) BY TAKING INTO CONSIDERATION ZONING LAWS, VALUATION BY LOCAL REAL ESTATE EXPERTS ON BASIS OF LOCATION AND USE OF LAND, PERCOLATION OF SOILS, ETC., AND THE MANNER IN WHICH REAL ESTATE BROKERS, ATTORNEYS AND SURVEYORS CHARGE THEIR FEES, I.E., WHETHER THEY ARE PERCENTAGE DERIVATIVES OF THE PURCHASE/SALE PRICE OR FLAT FEES. OFFICERS AND EMPLOYEES - TRANSFERS - RELOCATION EXPENSES - PRO RATA EXPENSE REIMBURSEMENT - HOUSE PURCHASE OR SALE - DOUBTFUL CASES TO GAO WHERE EMPLOYEE PURCHASES OR SELLS LAND IN EXCESS OF THAT REASONABLY RELATED TO A RESIDENCE SITE AND THERE IS DOUBT AS TO THE PROPRIETY OF THE AGENCY PRORATION DETERMINATION UNDER FEDERAL TRAVEL REGULATIONS (FPMR 101- 7) PARAGRAPH 2-6.1F (MAY 1973) OR THE EMPLOYEE TAKES EXCEPTION TO THE AGENCY DETERMINATION, THE CASE SHOULD BE FORWARDED TO THE COMPTROLLER GENERAL WITH SUPPORTING EVIDENCE FOR REVIEW AND DISPOSITION.

IN THE MATTER OF PRO RATA REIMBURSEMENT OF REAL ESTATE EXPENSES, JANUARY 16, 1975:

THIS MATTER IS BEFORE US ON A REQUEST FOR AN ADVANCE DECISION FROM MR. MAURICE S. WALKER, JR., AN AUTHORIZED CERTIFYING OFFICER IN THE ENVIRONMENTAL PROTECTION AGENCY (EPA) AND CONCERNS THE PROPER METHOD OF SETTLING THE SUPPLEMENTAL CLAIM OF MISS K. DIANE COURTNEY FOR CERTAIN REAL ESTATE EXPENSES WHICH WERE ADMINISTRATIVELY SUSPENDED FROM HER ORIGINAL CLAIM. THE EXPENSES WERE INCURRED IN CONNECTION WITH THE TRANSFER OF MISS COURTNEY'S OFFICIAL DUTY STATION IN AUGUST 1973.

THE FACTS IN THIS CASE ARE NOT IN DISPUTE. UPON HER TRANSFER TO RESEARCH TRIANGLE PARK, NORTH CAROLINA, MISS COURTNEY PURCHASED 43.003 ACRES OF LAND IN WHITE OAK TOWNSHIP ON WHICH SHE PLACED A MOBILE HOME TO BE USED AS HER RESIDENCE. THE RECORD CONTAINS A STATEMENT FROM MISS COURTNEY THAT THE LAND PURCHASE WAS NOT MADE FOR SPECULATION NOR SUBDIVISION BUT FOR THE SOLE PURPOSE OF UTILIZING THE LAND AS A PLACE WHERE HER LIVING QUARTERS WILL BE LOCATED. THE CLOSING STATEMENT PROVIDED BY THE LAW FIRM OF HOLLEMAN, SAVAGE AND MOORING OF APEX, NORTH CAROLINA, SHOWS, AMONG OTHER THINGS, THAT THE PURCHASE PRICE FOR THE LAND WAS $64,500, THE TITLE EXAMINATION FEE WAS $350, AND THE SURVEY FEE WAS $195. THE ATTORNEY'S FEE FOR TITLE EXAMINATION AND THE SURVEYOR'S FEE, WHICH ARE OTHERWISE PAYABLE UNDER THE FEDERAL TRAVEL REGULATIONS (FPMR 101-7) PARA. 2-6.2C (MAY 1973), WERE SUSPENDED ON THE GROUND THAT FTR PARA. 2-6.1F (MAY 1973) PROVIDES AMONG OTHER THINGS THE FOLLOWING:

F. PAYMENT OF EXPENSES BY EMPLOYEE PRO RATA ENTITLEMENT. *** THE EMPLOYEE SHALL ALSO BE LIMITED TO PRO RATA REIMBURSEMENT WHEN HE SELLS OR PURCHASES LAND IN EXCESS OF THAT WHICH REASONABLY RELATES TO THE RESIDENCE SITE.

THE CRUCIAL POINT IN THIS DIRECTIVE IS THE DETERMINATION OF HOW MUCH LAND "REASONABLY RELATES TO THE RESIDENCE SITE" AND HOW MUCH LAND OF THE PURCHASE OR SALE IS "IN EXCESS." THIS IS THE FIRST DETERMINATION THAT HAS TO BE MADE IN ORDER TO ASCERTAIN THE AMOUNT OF REIMBURSEMENT. WE BELIEVE THAT SUCH DETERMINATION SHOULD BE INITIALLY MADE BY THE ADMINISTRATIVE AGENCY TO WHICH THE CLAIM IS SUBMITTED BASED ON THE PREVAILING AND CUSTOMARY PRACTICES IN THE LOCALITY OF THE OFFICIAL DUTY STATION. IT IS AN OLD AND WELL-ESTABLISHED RULE OF LAW THAT IN MATTERS PERTAINING TO THE ACQUISITION, DISPOSITION, AND DEVOLUTION OF LAND, THE LAW WHICH GOVERNS IS THE LAW OF THE SITUS OF THE LAND. SEE 15A C.J.S. CONFLICT OF LAWS SEC. 19(1) (1967). THEREFORE, IT IS OUR OPINION THAT AT THE AGENCY LEVEL, THE OFFICER CONCERNED WITH DETERMINING WHAT CONSTITUTES "EXCESS LAND" IN CASES WHERE LARGE TRACTS OF LAND ARE INVOLVED SHOULD INFORM HIMSELF FIRST OF THE ZONING LAWS OF THE JURISDICTION WHERE THE LAND IS LOCATED. IF THE TOWNSHIP OR VILLAGE IS INCORPORATED, THE LOCAL REGULATION WILL PREVAIL. IF THE LAND IS LOCATED IN AN UNINCORPORATED COMMUNITY, THEN THE COUNTY OR THE STATE ZONING LAWS, IF ANY, WILL PREVAIL IF APPLICABLE.

ABSENT ANY ZONING LAWS OR REGULATIONS FOR THE BUILDING OF RESIDENTIAL DWELLINGS OR IF THE AREA IS GENERALLY ZONED FOR AGRICULTURAL USE AND THE SALE OR PURCHASE INVOLVES A FARM DWELLING WITH APPURTENANT OUTBUILDINGS, THE CERTIFYING OFFICER SHOULD TAKE INTO ACCOUNT SUCH FACTORS AS THE USE TO WHICH THE LAND HAS BEEN PUT IN THE PAST, ITS PRESENT UTILIZATION AND THE POTENTIAL FOR FUTURE USE. THAT WILL INCLUDE CONSIDERATION OF CROP GROWING, STANDING TIMBER, OTHER INCOME PRODUCING USE, FENCING, IRRIGATION, ETC. IN CASES OF UNIMPROVED LAND WHICH COULD BE SUBDIVIDED AND SOLD AS LOTS IN THE FUTURE, IT IS SUGGESTED THAT THE OFFICER TAKE INTO ACCOUNT THE SIZE OF THE LOTS IN OTHER SUBDIVISIONS IN THE AREA AND THE REQUIREMENTS OF THE LOCAL OR STATE DEPARTMENT OF HEALTH WHICH IS USUALLY CONCERNED WITH THE WASTE DISPOSAL SYSTEMS AND THE PERCOLATION QUALITY OF THE SOILS. MIGHT BE THAT IN A CERTAIN LOCALITY A HOUSE OR MOBILE HOME COULD BE LOCATED ON A THREE-FOURTHS ACRE LOT WHEREAS IN OTHER LOCALITIES THE REQUIREMENT MIGHT BE AT LEAST 5 ACRES IN ORDER TO PROPERLY PLACE THE DRAIN FIELDS FOR THE SEPTIC TANK SYSTEM.

ALSO, IN MATTERS CONCERNING LAND, WE ARE COGNIZANT OF THE FACT THAT LOCATION IS OF PARAMOUNT IMPORTANCE. HERE CONSIDERATION SHOULD BE GIVEN TO ACCESSABILITY, ROAD FRONTAGE, WATER SUPPLY, EASEMENTS THROUGH THE LAND, TOPOGRAPHY, ETC. IT MIGHT BE THAT A 5-ACRE TRACT WHICH IS SOLD IN A DISTRICT WHICH HAS 1-ACRE ZONING HAS ONLY ONE BUILDABLE SITE OF ABOUT ONE AND ONE-HALF ACRES AND THE REST OF THE LAND WAS SOLD WITH IT BECAUSE, FOR ALL PRACTICAL PURPOSES, IT WAS INDIVISIBLE, PROVIDED MORE PRIVACY AND WAS SOLD WITH THE BUILDING SITE AT A TOTAL PRICE FAR BELOW THE PRICE OF 5 BUILDABLE LOTS AND YET ABOVE THE PRICE OF A 1-ACRE TRACT.

IN REACHING HIS DETERMINATION ON THE MATTERS COVERED ABOVE, THE CERTIFYING OFFICER SHOULD RESORT TO THE AID OF EXPERTS IN THE REAL ESTATE FIELD. INFORMATION ON SUCH MATTERS COULD BE OBTAINED LOCALLY FROM RELIABLE REAL ESTATE BROKERS OR APPRAISERS AND/OR EMPLOYEES OF THE FARMERS HOME ADMINISTRATION WHO COULD ALSO SET A VALUATION ON THE LAND THAT GOES WITH THE RESIDENCE AND APPURTENANT BUILDINGS VIS-A-VIS THE REMAINING TRACT OF LAND. THE VALUATION OF THE EXCESS LAND FOR PRORATION PURPOSES WOULD BE THE DIFFERENCE BETWEEN THE PURCHASE OR SALE PRICE LESS THE VALUATION OF THE RESIDENCE, THE RESIDENCE SITE AND ITS APPURTENANT BUILDINGS.

IN PRORATING THE EXPENSES, HOWEVER, THE CERTIFYING OFFICER SHOULD ALSO TAKE INTO ACCOUNT THE PRACTICE OF BILLING BY ATTORNEYS, REAL ESTATE BROKERS AND SURVEYORS IN HIS LOCALITY. THERE ARE CERTAIN LEGAL SERVICES WHICH ARE PROVIDED FOR A FLAT FEE SUCH AS RECORDING OF A DOCUMENT OR DRAWING A DEED WHEREAS A SETTLEMENT FEE MIGHT BE BASED ON A PERCENTAGE OF THE PURCHASE/SALE PRICE OF THE PROPERTY AND MIGHT INCLUDE A FLAT FEE FOR TITLE SEARCH. IN THIS CONNECTION, BROKERAGE FEES ARE ALMOST ALWAYS BASED ON A PERCENTAGE OF THE SALE PRICE. IF THE TITLE EXAMINATION, FOR EXAMPLE, IS BASED ON A PERCENTAGE OF THE PURCHASE PRICE, THE AMOUNT OF THE EXPENSE SHOULD BE PRORATED IN ACCORDANCE WITH A RATIO FORMULA OF RESIDENCE SITE VALUE TO PURCHASE PRICE OF THE PROPERTY. ON THE OTHER HAND, IF THE ATTORNEY CHARGES A FLAT FEE FOR TITLE EXAMINATION, WHETHER IT CONCERNS 1 ACRE OR 5 ACRES, THE REIMBURSABLE EXPENSES SHOULD NOT BE PRORATED AT ALL BUT SHOULD BE PAID IN TOTO, PROVIDING THE FEE IS REASONABLE IN AMOUNT AND IN LINE WITH OTHER CHARGES FOR SIMILAR SERVICES IN THE LOCALITY CONCERNED.

SIMILAR CONSIDERATIONS SHOULD BE APPLIED TO THE SURVEYOR'S FEE. UNDERSTAND THAT A SURVEYOR'S FEE MIGHT BE COMPOSED OF A CHARGE FOR THE SURVEYOR'S SEARCH OF THE LAND RECORDS AND A CHARGE FOR THE FIELD WORK COVERING THE ACTUAL MEASUREMENT OF THE LAND NECESSARY FOR THE LEGAL DESCRIPTION OF THE PROPERTY. IN SUCH CASES CAREFUL CONSIDERATION SHOULD BE GIVEN TO THE CHARGES. THOSE THAT ARE RELATED TO THE FIELD WORK SHOULD BE PRORATED ACCORDING TO THE SIZE OF THE PROPERTY AND THE RATIO FORMULA DETERMINED AS ABOVE WHILE ALL CHARGES ATTRIBUTABLE TO WORK ON THE LAND RECORDS SHOULD BE PAID BECAUSE A SEARCHER COULD SPEND AS MUCH TIME WORKING ON THE LAND RECORDS TRACING THE EVOLUTION OF A SMALL PARCEL OF LAND AS HE/SHE WOULD ON A LARGE TRACT.

THE ABOVE METHODS OF DETERMINATION OF THE PORTION OF LAND WHICH "REASONABLY RELATES TO THE RESIDENCE SITE" WERE OFFERED AS EXAMPLES OF THE KINDS OF CONSIDERATIONS WHICH AGENCIES SHOULD TAKE INTO CONSIDERATION IN DETERMINING THE AMOUNT OF CHARGES WHICH ARE ATTRIBUTABLE TO FEES SUBJECT TO THE PRORATING DIRECTIVE OF FTR PARA. 2 6.1F (MAY 1973). THEY ARE BY NO MEANS INTENDED TO BE EXHAUSTIVE. IN CASE OF ANY DOUBT AS TO THE PROPRIETY OF CERTIFYING A PARTICULAR VOUCHER FOR PAYMENT, OR IN CASE THE EMPLOYEE TAKES EXCEPTION TO THE ADMINISTRATIVE DETERMINATION, THE MATTER MAY BE FORWARDED TO OUR OFFICE, BUT SHOULD BE ACCOMPANIED BY THE TYPE OF SUPPORTING EVIDENCE ON WHICH THE ORIGINAL DETERMINATION WAS MADE AS DESCRIBED HEREIN, FOR REVIEW AND DISPOSITION.