B-174644, APR 20, 1972
Highlights
REIMBURSEMENT OF ADVISORY LEGAL SERVICES AND LOAN-ASSUMPTION FEES ARE PRECLUDED BY SECTION 4.2(C) AND (D) OF OMB CIRCULAR NO. WHICH WAS FORWARDED TO THIS OFFICE ON DECEMBER 1. TIMM'S FORMER RESIDENCE WAS OCCUPIED UNDER A "LAND CONTRACT" AND HE. DID NOT HAVE LEGAL TITLE TO THE PROPERTY AT THE TIME OF SALE. THE PRIMARY QUESTION IS WHETHER SUCH CONTRACTUAL ARRANGEMENT CONSTITUTES THE SALE OF A RESIDENCE WITHIN THE TERMS OF 5 U.S.C. 5724AA)(4) AND THE IMPLEMENTING REGULATIONS CONTAINED IN SECTION 4 OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. WE HELD THAT THE PURCHASE OF A RESIDENCE UNDER A "LAND INSTALLMENT CONTRACT" - SIMILAR IN NATURE TO THE LAND CONTRACT INVOLVED HERE - TRANSFERRED AN EQUITABLE INTEREST WHICH EFFECTED A PURCHASE WHICH WAS SUFFICIENT FOR PURPOSES OF PAYMENT OF REAL ESTATE EXPENSES UNDER THE APPLICABLE LAW AND REGULATIONS.
B-174644, APR 20, 1972
CIVILIAN EMPLOYEE - LAND CONTRACT - REAL ESTATE EXPENSES - REIMBURSEMENT CONCERNING THE CLAIM OF RAYMOND K. TIMM FOR CERTAIN REAL ESTATE EXPENSES INCIDENT TO THE SALE OF A RESIDENCE OCCUPIED UNDER A "LAND CONTRACT." ALTHOUGH, UNDER THE SUBJECT CONTRACT, THE EMPLOYEE DID NOT HOLD LEGAL TITLE TO THE PROPERTY AT THE TIME OF SALE, THE COMP. GEN. HAS PREVIOUSLY HELD THAT SUCH CONTRACTS TRANSFER AN EQUITABLE INTEREST SUFFICIENT FOR PURPOSES OF PAYMENT OF REAL ESTATE EXPENSES WITHIN THE PROVISIONS OF 5 U.S.C. 5724AA)(4). B-165146, SEPTEMBER 16, 1968. HOWEVER, REIMBURSEMENT OF ADVISORY LEGAL SERVICES AND LOAN-ASSUMPTION FEES ARE PRECLUDED BY SECTION 4.2(C) AND (D) OF OMB CIRCULAR NO. A-56. THE ENCLOSED VOUCHER MAY PROPERLY BE CERTIFIED FOR PAYMENT IN ACCORDANCE WITH THE FOREGOING.
TO MAJOR R. T. O'BRIEN:
WE REFER FURTHER TO YOUR LETTER OF OCTOBER 4, 1971, REFERENCE DCRO FA, PERTAINING TO THE CLAIM OF MR. RAYMOND K. TIMM, AN EMPLOYEE OF YOUR AGENCY, WHICH WAS FORWARDED TO THIS OFFICE ON DECEMBER 1, 1971, BY THE PER DIEM, TRAVEL AND TRANSPORTATION ALLOWANCE COMMITTEE. YOUR LETTER REQUESTS A DECISION CONCERNING THE PROPRIETY OF THE PAYMENT OF CERTAIN REAL ESTATE EXPENSES INCIDENT TO THE SALE OF A RESIDENCE BY MR. TIMM UPON HIS TRANSFER FROM CLEVELAND, OHIO, TO COLUMBUS, OHIO. MR. TIMM'S FORMER RESIDENCE WAS OCCUPIED UNDER A "LAND CONTRACT" AND HE, THEREFORE, DID NOT HAVE LEGAL TITLE TO THE PROPERTY AT THE TIME OF SALE.
THE PRIMARY QUESTION IS WHETHER SUCH CONTRACTUAL ARRANGEMENT CONSTITUTES THE SALE OF A RESIDENCE WITHIN THE TERMS OF 5 U.S.C. 5724AA)(4) AND THE IMPLEMENTING REGULATIONS CONTAINED IN SECTION 4 OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56 (REVISED JUNE 26, 1969).
THE PAPERS SUBMITTED POINT OUT THAT UNDER THE SO-CALLED "LAND CONTRACT" THE VENDOR AGREES TO CONVEY TITLE IN REAL PROPERTY AND THE VENDEE AGREES TO PAY THE PURCHASE PRICE IN INSTALLMENTS WITH RETENTION OF TITLE IN THE VENDOR AS SECURITY FOR PAYMENT. IN 1969 THE STATE ENACTED PROVISIONS REGULATING LAND INSTALLMENT CONTRACTS WHICH DESCRIBE THE KIND OF TRANSACTION INVOLVED. OHIO REVISED CODE, SUBSECTION 5313.01(A).
IN B-165146, SEPTEMBER 16, 1968, WE HELD THAT THE PURCHASE OF A RESIDENCE UNDER A "LAND INSTALLMENT CONTRACT" - SIMILAR IN NATURE TO THE LAND CONTRACT INVOLVED HERE - TRANSFERRED AN EQUITABLE INTEREST WHICH EFFECTED A PURCHASE WHICH WAS SUFFICIENT FOR PURPOSES OF PAYMENT OF REAL ESTATE EXPENSES UNDER THE APPLICABLE LAW AND REGULATIONS. SEE ALSO 46 COMP. GEN. 677 (1967) CITED IN B-165146. ACCORDINGLY, OUR VIEW IS THAT THE INTEREST TRANSFERRED HERE EFFECTED A SALE WHICH PERMITS REIMBURSEMENT OF REAL ESTATE EXPENSES UNDER THE PROVISIONS OF 5 U.S.C. 5724AA)(4) AND THE RELATED REGULATIONS IN CIRCULAR NO. A-56.
IN REVIEWING THE DOCUMENTATION SUBMITTED, WE NOTE THAT REIMBURSEMENT FOR LEGAL FEES IN THE AMOUNT OF $25 IS CLAIMED FOR THE SERVICES OF MR. ELLIOTT RAY KELLY, ATTORNEY IN THE SALE OF THE FORMER RESIDENCE. IN THIS CONNECTION SECTION 4.2(C) OF CIRCULAR NO. A-56 STATES:
"C. LEGAL AND RELATED COSTS. TO THE EXTENT SUCH COSTS HAVE NOT BEEN INCLUDED IN BROKERS' OR SIMILAR SERVICES FOR WHICH REIMBURSEMENT IS CLAIMED UNDER OTHER CATEGORIES, THE FOLLOWING EXPENSES ARE REIMBURSABLE WITH RESPECT TO THE SALE AND PURCHASE OF RESIDENCES IF THEY ARE CUSTOMARILY PAID BY THE SELLER OF A RESIDENCE AT THE OLD OFFICIAL STATION OR IF CUSTOMARILY PAID BY THE PURCHASER OF A RESIDENCE AT THE NEW OFFICIAL STATION, TO THE EXTENT THEY DO NOT EXCEED AMOUNTS CUSTOMARILY CHARGED IN THE LOCALITY OF THE RESIDENCE; COSTS OF (1) SEARCHING TITLE, PREPARING ABSTRACT, AND LEGAL FEES FOR A TITLE OPINION, OR (2) WHERE CUSTOMARILY FURNISHED BY THE SELLER, THE COST OF A TITLE INSURANCE POLICY; COSTS OF PREPARING CONVEYANCES, OTHER INSTRUMENTS, AND CONTRACTS; RELATED NOTARY FEES AND RECORDING FEES; COSTS OF MAKING SURVEYS, PREPARING DRAWINGS OR PLATS WHEN REQUIRED FOR LEGAL OR FINANCING PURPOSES; AND SIMILAR EXPENSES. COSTS OF LITIGATION ARE NOT REIMBURSABLE."
WE HAVE CONSISTENTLY HELD THAT NO REIMBURSEMENT IS TO BE ALLOWED FOR LEGAL SERVICES WHICH ARE OF AN ADVISORY NATURE. B-163690, MARCH 29, 1968; B-150304, FEBRUARY 18, 1972. SINCE THE SETTLEMENT INDICATES A CHARGE OF $195.50 FOR TITLE SERVICES, IT APPEARS THAT THE PAYMENT OF $25 FOR LEGAL FEES COVERS SERVICES OF AN ADVISORY NATURE. THEREFORE, ON THE PRESENT RECORD THE $25 ITEM WOULD NOT BE FOR ALLOWANCE.
ADDITIONALLY, WE NOTE $40 IS CLAIMED FOR REIMBURSEMENT OF A LOAN ASSUMPTION FEE IN THE PURCHASE OF THE RESIDENCE AT THE NEW DUTY STATION. WE HAVE HELD THAT THE REIMBURSEMENT OF LOAN-ASSUMPTION FEES - WHICH ARE REGARDED AS FINANCE CHARGES UNDER THE TRUTH IN LENDING ACT - IS PRECLUDED BY SECTION 4.2D OF CIRCULAR NO. A-56. SEE B-168870, FEBRUARY 13, 1970; B- 170787, NOVEMBER 17, 1970. ACCORDINGLY, THIS ITEM IS FOR DISALLOWANCE.
THE VOUCHER, WHICH IS RETURNED HEREWITH, IF OTHERWISE CORRECT MAY BE PAID ONLY WHEN MODIFIED TO ACCORD WITH THIS DECISION.