B-222130, AUG 22, 1986

B-222130: Aug 22, 1986

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OFFICERS AND EMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES - TIME LIMITATION DIGEST: AN EMPLOYEE WAS TRANSFERRED IN THE INTEREST OF THE GOVERNMENT. THE ANSWER IS NO. THE TERM "SETTLEMENT" AS USED IN THE FTR REFERS TO THE CLOSING WHERE THE PRICE IS PAID TO THE SELLER AND THE PROPERTY IS CONVEYED TO THE PURCHASER. SETTLEMENT WAS NOT CONCLUDED WITHIN THE TIME LIMITATION PROVIDED FOR IN THE FTR SO AS TO PERMIT REIMBURSEMENT. THE ACTUAL TRANSFER TRANSACTION WAS NOT CONCLUDED UNTIL THAT LATER DATE. KERR - REAL ESTATE EXPENSES - TIME LIMITATION: THIS DECISION IS IN RESPONSE TO A REQUEST FROM THE CHIEF. THE CLAIM IS DENIED FOR THE FOLLOWING REASONS. WAS STATIONED IN SALISBURY. HE WAS INVOLVED IN A REDUCTION-IN-FORCE ACTION.

B-222130, AUG 22, 1986

OFFICERS AND EMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES - TIME LIMITATION DIGEST: AN EMPLOYEE WAS TRANSFERRED IN THE INTEREST OF THE GOVERNMENT. HE HAD 3 YEARS FROM THE DATE HE REPORTED FOR DUTY AT HIS NEW DUTY STATION (SEPTEMBER 27, 1982), TO SELL HIS RESIDENCE AT HIS OLD DUTY STATION. SHORTLY BEFORE THE THIRD ANNIVERSARY OF THAT DATE, HE ENTERED INTO AN AGREEMENT TO SELL, WHICH CONTAINED A STIPULATED CLOSING DATE OF OCTOBER 31, 1985. ON THE QUESTION AS TO WHETHER THAT AGREEMENT QUALIFIES AS SETTLEMENT UNDER PARAGRAPH 2-6.1E OF THE FEDERAL TRAVEL REGULATIONS (FTR) SO AS TO PERMIT REAL ESTATE EXPENSE REIMBURSEMENT, THE ANSWER IS NO. THE TERM "SETTLEMENT" AS USED IN THE FTR REFERS TO THE CLOSING WHERE THE PRICE IS PAID TO THE SELLER AND THE PROPERTY IS CONVEYED TO THE PURCHASER. SETTLEMENT WAS NOT CONCLUDED WITHIN THE TIME LIMITATION PROVIDED FOR IN THE FTR SO AS TO PERMIT REIMBURSEMENT. THE AGREEMENT PROVIDED FOR A FUTURE CLOSING DATE AFTER THE THIRD ANNIVERSARY, AND THE ACTUAL TRANSFER TRANSACTION WAS NOT CONCLUDED UNTIL THAT LATER DATE.

JOHN E. KERR - REAL ESTATE EXPENSES - TIME LIMITATION:

THIS DECISION IS IN RESPONSE TO A REQUEST FROM THE CHIEF, FINANCIAL SERVICES SECTION, MINE SAFETY AND HEALTH ADMINISTRATION, DEPARTMENT OF LABOR. IT CONCERNS THE ENTITLEMENT OF A FORMER EMPLOYEE TO BE REIMBURSED REAL ESTATE TRANSACTION EXPENSES INCIDENT TO A PERMANENT CHANGE-OF-STATION TRANSFER IN SEPTEMBER 1982. THE CLAIM IS DENIED FOR THE FOLLOWING REASONS.

BACKGROUND

MR. JOHN E. KERR, AN EMPLOYEE OF THE MINE SAFETY AND HEALTH ADMINISTRATION, WAS STATIONED IN SALISBURY, NORTH CAROLINA. IN JUNE 1982, HE WAS INVOLVED IN A REDUCTION-IN-FORCE ACTION. IN SEPTEMBER 1982, HE WAS REHIRED AND RELOCATED TO JELLICO, TENNESSEE, WHERE HE REPORTED FOR DUTY ON SEPTEMBER 27, 1982.

ON REHIRE AND TRANSFER, HE PLACED HIS RESIDENCE IN THE SALISBURY, NORTH CAROLINA, AREA ON THE MARKET. BECAUSE HE WAS UNABLE TO SELL HIS RESIDENCE WITHIN 2 YEARS HE REQUESTED A 1 YEAR EXTENSION ON AUGUST 20, 1984. SEPTEMBER 6, 1984, HIS REQUEST WAS GRANTED. HE WAS ALSO ADVISED THAT THE 1-YEAR EXTENSION WOULD EXPIRE ON SEPTEMBER 27, 1985.

ON MARCH 15, 1985, MR. KERR VOLUNTARILY RESIGNED HIS POSITION AND LEFT THE FEDERAL GOVERNMENT. ON SEPTEMBER 20, 1985, HE ENTERED INTO AN "OFFER TO PURCHASE AND CONTRACT" AGREEMENT, WHEREIN HE AGREED TO SELL HIS SALISBURY, NORTH CAROLINA, RESIDENCE TO FOUR PARTIES WITH AN AGREED TO CLOSING DATE OF OCTOBER 31, 1985.

THE CONCERN EXPRESSED BY THE AGENCY IS WHETHER IT CAN BE HELD LIABLE FOR THESE EXPENSES WHEN AN EMPLOYEE VOLUNTARILY RESIGNS FROM THE GOVERNMENT PRIOR TO THE RESIDENCE SALE, EVEN THOUGH THE EMPLOYEE HAS COMPLETELY SATISFIED THE TIME REQUIREMENT UNDER A PROPERLY EXECUTED 1 YEAR SERVICE AGREEMENT.

DECISION

ON THE FACTS, WE NEED NOT CONSIDER THE ISSUE OF THE EFFECT OF VOLUNTARY RESIGNATION PRIOR TO RESIDENCE SALE IN MR. KERR'S CASE. THE QUESTION FOR RESOLUTION IS WHETHER THE AGREEMENT EXECUTED SEPTEMBER 20, 1985, QUALIFIES AS THE SETTLEMENT AS THAT TERM IS USED IN THE FEDERAL TRAVEL REGULATIONS. IT IS OUR VIEW THAT IT DID NOT.

THE ENTITLEMENT OF FEDERAL EMPLOYEES TO BE REIMBURSED FOR CERTAIN EXPENSES INCURRED IN CONNECTION WITH RESIDENCE TRANSACTIONS INCIDENT TO A PERMANENT CHANGE OF STATION IS GOVERNED BY 5 U.S.C. SEC. 5724A AND REGULATIONS ISSUED PURSUANT THERETO. THE REGULATIONS APPLICABLE HERE ARE THOSE CONTAINED IN PART 6 OF CHAPTER 2, FEDERAL TRAVEL REGULATIONS, FPMR 101-7, INCORP. BY REF., 41 C.F.R. SEC. 101-7.003 (1985) (FTR), AS AMENDED, IN PART, BY GSA BULLETIN FPMR A-40 (SUPP. 4, AUGUST 23, 1982).

PARAGRAPH 2-6.1E OF THE REGULATIONS, AS AMENDED, PROVIDES IN PART:

"E. TIME LIMITATION

"(1) INITIAL PERIOD. THE SETTLEMENT DATES FOR THE SALE *** FOR WHICH REIMBURSEMENT IS REQUESTED ARE NOT LATER THAN 2 YEARS AFTER THE DATE THAT THE EMPLOYEE REPORTED FOR DUTY AT THE NEW OFFICIAL STATION.

"(2) EXTENSION OF TIME LIMITATION

"(A) UPON AN EMPLOYEE'S WRITTEN REQUEST, THE 2-YEAR TIME LIMITATION FOR COMPLETION OF THE SALE *** MAY BE EXTENDED BY THE HEAD OF THE AGENCY OR HIS/HER DESIGNEE FOR AN ADDITIONAL PERIOD OF TIME NOT TO EXCEED 1 YEAR."

WE HAVE HELD THAT THE TERM "SETTLEMENT" AS USED IN FTR PARA. 2-6.1E REFERS TO THE CLOSING OF THE REAL ESTATE TRANSACTION BY THE PAYMENT OF THE CONTRACT PRICE AND THE CONVEYANCE OF THE PROPERTY TO THE PURCHASER. GLENN A. KOVAR, B-186003, OCTOBER 4, 1976; B-165115, SEPTEMBER 11, 1968. FURTHER, THE TIME LIMIT MAY NOT BE WAIVED OR EXTENDED BEYOND THE 1-YEAR EXTENSION PERIOD REGARDLESS OF THE CIRCUMSTANCES. SEE DAVID N. CARRELL, B-215733, SEPTEMBER 25, 1984. SEE ALSO BOBBIE W. CURTIS, 64 COMP.GEN. 215 (1985).

THE DOCUMENT IN QUESTION, "OFFER TO PURCHASE AND CONTRACT," WHILE IT PURPORTS TO IRREVOCABLY BIND THE PARTIES, DOES NOT STATE WHAT IF ANY PENALTIES ARE ASSESSABLE IN THE EVENT EITHER PARTY TERMINATES THE AGREEMENT. IF IS FURTHER NOTED IN ITEMS 7 AND 8 OF THE AGREEMENT THAT ALL DOCUMENTS AND PAPERS REQUIRED IN CONNECTION WITH COMPLETION OF THE SALES TRANSACTION WOULD BE EXECUTED AT CLOSING. ACCORDING TO OTHER DOCUMENTS, CLOSING DID NOT OCCUR UNTIL OCTOBER 31, 1985, AT WHICH TIME THE SALE AND PURCHASE WAS CONCLUDED, THE TITLE TRANSFERRED, AND DISTRIBUTION OF PROCEEDS MADE.

ACCORDINGLY, SINCE THE TIME LIMIT AS EXTENDED EXPIRED ON SEPTEMBER 27, 1985, AND SETTLEMENT DID NOT OCCUR UNTIL OCTOBER 31, 1985, MR. KERR MAY NOT BE REIMBURSED EXPENSES OF SELLING HIS RESIDENCE AS INCIDENT TO HIS TRANSFER ON SEPTEMBER 27, 1982.