B-171338, FEB 10, 1971

B-171338, FEB 10, 1971

CHANGE OF STATION - REAL ESTATE EXPENSES - LEGAL EXPENSES DECISION HOLDING THAT ADOLPH O. BERGER IS ENTITLED TO RETAIN $663 PREVIOUSLY PAID HIM IN REIMBURSEMENT OF REAL ESTATE EXPENSES INCIDENT TO HIS CHANGE OF OFFICIAL STATION FROM CHICAGO TO SAN FRANCISCO. COPIES OF BILLS FURNISHED BY THE CHICAGO TITLE AND TRUST COMPANY SHOW THAT THE ITEM OF $313 COVERED SEVERAL PURPOSES THAT THE SELLER CUSTOMARILY FURNISHED IN THE CHICAGO AREA. FURTHER, THE STATEMENT FURNISHED BY THE ATTORNEY RELATIVE TO LEGAL SERVICES PLUS MR. BERGER'S FURTHER EXPLANATION WARRANTS THE CONCLUSION THAT THE SERVICES AS ITEMIZED WERE OF THE TYPE PROPERLY REIMBURSABLE UNDER SECTION 4.2C, BOB CIR. NO. A-56.

TO MR. VLADIMIR OLEYNIK:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 18, 1970, REQUESTING A DECISION AS TO WHETHER OR NOT MR. ADOLPH O. BERGER IS ENTITLED TO RETAIN THE $663 PREVIOUSLY PAID TO HIM IN REIMBURSEMENT OF CERTAIN REAL ESTATE EXPENSES INCURRED IN THE SALE OF A HOME INCIDENT TO HIS CHANGE OF OFFICIAL STATION FROM CHICAGO, ILLINOIS, TO SAN FRANCISCO, CALIFORNIA.

BY INFORMAL INQUIRY NO. 68-5, OCTOBER 16, 1968, OUR CIVIL DIVISION QUESTIONED TWO ITEMS OF REAL ESTATE EXPENSES ALLOWED ON MR. BERGER'S TRAVEL REIMBURSEMENT VOUCHER. THE ITEM OF $313 REPRESENTING CHICAGO TITLE AND TRUST COMPANY CHARGES WAS NOT SUPPORTED BY A STATEMENT ITEMIZING THE CHARGES. THE ITEM OF $350 REPRESENTING LEGAL EXPENSES IN CONNECTION WITH THE SALE OF THE HOUSE WAS QUESTIONED BECAUSE THE STATEMENT FURNISHED DID NOT CLEARLY INDICATE THAT THE EXPENSES WERE PROPERLY REIMBURSABLE UNDER SUBSECTION 4.2C OF BUREAU OF THE BUDGET CIRCULAR NO. A-56.

THERE HAVE BEEN FURNISHED COPIES OF BILLS OF THE CHICAGO TITLE AND TRUST COMPANY SHOWING THAT THE ITEM OF $313 IS THE AGGREGATE OF THE COST OF REISSUING TITLE INSURANCE AND INCREASING THE INSURANCE TO THE SALE AMOUNT, $267, RECORDING CHARGE FOR RELEASE DEED, $4, AND ONE-HALF OF THE TOTAL ESCROW FEE, $42. THE COMPANY INDICATES THAT IT IS CUSTOMARY IN THE CHICAGO AREA FOR THE SELLER TO FURNISH SUCH EVIDENCE OF TITLE TO THE PURCHASER. IT ALSO IS STATED THAT THE ESCROW FEE REPRESENTS THE SELLER'S SHARE OF HANDLING THE DEAL IN THE COMPANY'S ESCROW DEPARTMENT AND IS AGREED UPON BETWEEN THE PARTIES.

WE HAVE HELD THAT IF IT IS THE CUSTOM OF AN AREA FOR THE SELLER TO PURCHASE A TITLE INSURANCE POLICY FOR THE BENEFIT OF THE BUYER IN LIEU OF SHOWING MARKETABLE TITLE BY A TITLE SEARCH, AN ABSTRACT OF TITLE OR A LEGAL OPINION, THE COST OF SUCH INSURANCE IS REIMBURSABLE. SEE 46 COMP. GEN. 884 (1967) AND B-161459, OCTOBER 21, 1970, COPIES HEREWITH. WE HAVE ALSO HELD THAT ONE-HALF OF THE ESCROW FEE IS REIMBURSABLE WHEN IT IS COMMON PRACTICE IN THE AREA FOR THE BUYER AND THE SELLER EACH TO PAY ONE- HALF OF THE ESCROW FEE. SEE B-162511, OCTOBER 13, 1967, COPY HEREWITH.

THE STATEMENT FURNISHED BY THE ATTORNEY RELATIVE TO LEGAL SERVICES RENDERED IN CONNECTION WITH THE SALE OF THE HOUSE IS ITEMIZED AS TO DAYS AND TYPE OF SERVICE BUT THE FEE IS CHARGED ON THE AGGREGATE NUMBER OF HOURS INVOLVED AND THE AMOUNT FOR EACH SERVICE IS NOT ALLOCATED. HOWEVER, EXCEPT FOR THE SERVICES SHOWN FOR MAY 1967, DESIGNATED AS "ADVICE AS TO LEGAL ASPECTS OF EXCLUSIVE LISTING WITH REAL ESTATE AGENTS" THE SERVICES SEEM TO BE OF THE TYPE CONNECTED WITH THE PREPARATION OF THE TRANSFER PAPERS. MR. BERGER STATES THAT AT THE TIME HE TALKED WITH HIS ATTORNEY ABOUT THE BROKER, HE HAD ALREADY SELECTED A BROKER AND IT THUS APPEARS THAT THE CONVERSATIONS WERE FOR THE PURPOSE OF FAMILIARIZING THE ATTORNEY WITH THE ASPECTS OF THE SALE. MR. BERGER'S FURTHER EXPLANATION WARRANTS THE CONCLUSION THAT THE ATTORNEY'S SERVICES AS ITEMIZED WERE OF THE TYPE PROPERLY REIMBURSABLE UNDER SUBSECTION 4.2C. SEE B-162227, MARCH 31, 1970, COPY HEREWITH, AND B-160799, OCTOBER 15, 1970, TO YOU.

IN VIEW OF THE FOREGOING NO FURTHER QUESTION WILL BE RAISED WITH RESPECT TO THESE REAL ESTATE EXPENSES AND MR. BERGER MAY RETAIN THE AMOUNT INVOLVED.