B-171953, APR 9, 1973

B-171953, APR 9, 1973

DECISION DENYING CERTIFICATION FOR VOUCHER SUBMITTED FOR REIMBURSEMENT OF PART OF REAL ESTATE COMMISSION WHERE SALESMAN REMITTED A PORTION THEREOF PURPORTEDLY AS A REDUCTION OF THE POINTS REQUIRED TO BE PAID BY THE SELLER SINCE THIS PURPOSE DID NOT CONSTITUTE A SERVICE IN SELLING THE RESIDENCE.

TO MR. CURTIS L. SMITH:

THIS IS IN REPLY TO YOUR LETTER DATED NOVEMBER 13, 1972, REFERENCE 6540- 5, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER YOU MAY CERTIFY FOR PAYMENT A RECLAIM VOUCHER SUBMITTED BY MR. CARL E. WEBB, AN EMPLOYEE OF THE FOREST SERVICE, IN THE AMOUNT OF $470 FOR EXPENSES IN CONNECTION WITH A REAL ESTATE TRANSACTION UPON A CHANGE OF OFFICIAL STATION FROM ATLANTA, GEORGIA, TO MILWAUKEE, WISCONSIN.

INCIDENT TO HIS TRANSFER OF OFFICIAL STATION, MR. WEBB SOLD HIS RESIDENCE IN ATLANTA THROUGH A REAL ESTATE FIRM. THE LOAN CLOSING STATEMENT INDICATES THAT HE SOLD HIS HOUSE FOR A PRICE OF $42,000 AND THAT A SALES COMMISSION OF 6 PERCENT OR $2,520 WAS PAID TO THE REAL ESTATE AGENT. HOWEVER, YOU STATE THAT IN OBTAINING A BUYER FOR THE HOUSE THE REAL ESTATE AGENT HAD A QUICK OFFER FROM A BUYER WHO WANTED TO PURCHASE THE HOUSE UNDER A VETERANS ADMINISTRATION GUARANTEED LOAN. TO COMPLETE THIS SALE MR. WEBB WAS REQUIRED TO PAY $1,470 IN POINTS WHICH MADE THE NET SALES PRICE LESS THAN MR. WEBB WAS WILLING TO ACCEPT JUST TO MAKE A QUICK SALE. ACCORDINGLY, AS AN INDUCEMENT TO TAKE THE BUYER'S OFFER, THE REAL ESTATE AGENT VOLUNTEERED TO PAY $470 TOWARDS THE AMOUNT REQUIRED FOR POINTS. MR. WEBB ACCEPTED THIS OFFER AND THE REAL ESTATE AGENT GAVE MR. WEBB A CHECK FOR $470 AT THIS TIME.

YOU REGARDED THE $470 RECEIVED BY MR. WEBB FROM THE REAL ESTATE AGENT AS A REDUCTION OF THE REAL ESTATE COMMISSION AND THUS DISALLOWED MR. WEBB'S CLAIM FOR REIMBURSEMENT TO THIS EXTENT. MR. WEBB HAS SUBMITTED THE PRESENT RECLAIM VOUCHER FOR THIS AMOUNT APPARENTLY ON THE BASIS THAT THE $470 WAS PAID TO HIM BY THE REAL ESTATE AGENT AS A REDUCTION OF THE AMOUNT REQUIRED FOR POINTS RATHER THAN A REDUCTION OF THE REAL ESTATE COMMISSION.

SECTION 4.2A OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56, REVISED, PROVIDES FOR REIMBURSEMENT OF REAL ESTATE COMMISSIONS IN PART AS FOLLOWS: "*** A BROKER'S FEE OR REAL ESTATE COMMISSION PAID BY THE EMPLOYEE FOR SERVICES IN SELLING HIS RESIDENCE IS REIMBURSABLE ***." UNDER THIS PROVISION THE EMPLOYEE MAY BE REIMBURSED FOR A REAL ESTATE COMMISSION BUT ONLY TO THE EXTENT HE HAS ACTUALLY PAID FOR SERVICES IN SELLING THE HOUSE.

IN THE PRESENT CASE THE RECORD INDICATES THAT MR. WEBB PAID THE REAL ESTATE AGENT A COMMISSION OF $2,520 AND THAT THE REAL ESTATE AGENT HAD PREVIOUSLY GIVEN MR. WEBB $470. THUS, MR. WEBB WAS ACTUALLY REQUIRED TO PAY A REAL ESTATE COMMISSION OF ONLY $2,050 AND UNDER THE ABOVE PROVISION ONLY THIS AMOUNT IS REIMBURSABLE. MR. WEBB'S CONTENTION THAT THE REAL ESTATE AGENT INTENDED THE $470 PAYMENT TO HIM TO BE A REDUCTION OF THE POINTS REQUIRED TO BE PAID DOES NOT ALTER THIS CONCLUSION SINCE THE PAYMENT OF A PORTION OF THE POINTS BY THE REAL ESTATE AGENT CANNOT BE CONSIDERED A SERVICE IN SELLING THE RESIDENCE FOR WHICH REIMBURSEMENT IS AUTHORIZED BY SECTION 4.2A OF CIRCULAR NO. A 56. MOREOVER, SINCE SUBSECTION 4.2D OF CIRCULAR NO. A-56 SPECIFICALLY PRECLUDES REIMBURSEMENT FOR POINTS, AN EMPLOYEE CANNOT RECAST A NONREIMBURSABLE EXPENSE, SUCH AS POINTS, AS A REIMBURSABLE EXPENSE THROUGH THE MEDIUM OF AN INFORMAL AGREEMENT TO OBTAIN REIMBURSEMENT. CF. B-163253, MAY 24, 1968, COPY ENCLOSED.

IN VIEW OF THE ABOVE, THE VOUCHER RETURNED HEREWITH MAY NOT BE CERTIFIED FOR PAYMENT.