B-174527, AUG 23, 1974

B-174527, AUG 23, 1974

WHERE THROUGH NO FAULT OF CLAIMANT DESTRUCTION OF COMPANY RECORDS AFTER A PERIOD OF TIME PREVENTED CALCULATION OF ACTUAL CLOSING COSTS PAID BY SELLER, LEVITT AND SONS, INC., AND INCLUDED IN SELLING PRICE OF MARYLAND RESIDENCE PURCHASED BY CLAIMANT ON OCTOBER 4, 1967, INCIDENT TO CHANGE OF OFFICIAL STATION FROM INDIANAPOLIS, INDIANA, TO WASHINGTON, D.C., DOCUMENTATION AS TO THE AVERAGE CLOSING COSTS FOR THE TYPE OF DWELLING PURCHASED IS DETERMINED TO BE SUFFICIENT SUBSTANTIATION UNDER THESE CIRCUMSTANCES FOR ALLOWANCE OF EMPLOYEE'S CLAIM FOR $300 CLOSING COSTS IN ACCORDANCE WITH 52 COMP. GEN 11 (1972) AND SUBSECTIONS 4.1 AND 4.3A OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR NO. A-56.

RUSSELL G. MONTGOMERY - RELOCATION EXPENSES - CLOSING COSTS:

THIS ACTION IS IN RESPONSE TO A LETTER DATED DECEMBER 19, 1973, FROM MR. JAMES L. HUMPHREY, AUTHORIZED CERTIFYING OFFICER OF THE GENERAL ACCOUNTING OFFICE REQUESTING A DECISION AS TO THE ENTITLEMENT OF MR. RUSSELL G. MONTGOMERY, AN EMPLOYEE OF THE TRANSPORTATION AND CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE, TO REIMBURSEMENT OF CLOSING COSTS IN THE AMOUNT OF $300 PAID IN CONNECTION WITH THE PURCHASE OF HIS RESIDENCE IN BOWIE, MARYLAND, INCIDENT TO A TRANSFER OF OFFICIAL STATION FROM INDIANAPOLIS, INDIANA, TO WASHINGTON, D.C., ON OCTOBER 4, 1967.

THE COPY OF THE CLOSING STATEMENT FURNISHED SHOWS THE COST OF THE HOUSE PURCHASED AND OTHER DEBITS AND CREDITS BUT THE COSTS OF CLOSING WERE NOT SPECIFICIALLY SET FORTH THEREIN. IN RESPONSE TO INQUIRY FROM THE CLAIMANT, THE GENERAL ATTORNEY FOR LEVITT RESIDENTIAL COMMUNITIES, INC. ADVISED, BY LETTER DATED NOVEMBER 2, 1973, THAT THERE WAS NO WAY IN WHICH THEY COULD CALCULATE THE ACTUAL CLOSING COSTS PAID BY THE CLAIMANT AS THEY WERE INCLUDED AS PART OF THE PURCHASE PRICE OF HIS HOUSE, AND THAT ALL ESSENTIAL RECORDS CONTAINING SUCH INFORMATION HAD BEEN DESTROYED IN THE PASSAGE OF TIME. FURTHERMORE, THERE WAS NO ONE THERE WHO COULD DEFINITELY STATE WHAT THE CLOSING COSTS WERE, AND THAT THE ONLY ACTUAL FEES WHICH COULD BE DETERMINED WOULD BE THE REVENUE STAMPS AND RECORDING FEES OBTAINABLE AT THE COURT HOUSE IN UPPER MARLBORO. HE CONCLUDED THAT "IN THE ABSENCE OF DEFINITE RECORDS, IT SEEMS TO BE THE CONSENSUS AROUND HERE THAT THE CLOSING COSTS ON THE PURCHASE OF YOUR HOUSE AMOUNTED TO APPROXIMATELY $300." THE SUFFICIENCY OF THIS CONCLUSION TO SUBSTANTIATE REIMBURSEMENT FOR CLOSING COSTS PAID BY THE PURCHASER PURSUANT TO OMB CIRCULAR NO. A-56, IS IN ISSUE.

SECTION 4.2C OF OMB CIRCULAR NO. A-56, REVISED OCTOBER 12, 1966, WHICH WAS IN EFFECT AT THE TIME OF THE PURCHASE, AUTHORIZED REIMBURSEMENT OF LEGAL AND RELATED COSTS. IT PROVIDED THAT TO THE EXTENT SUCH COSTS HAVE NOT BEEN INCLUDED IN THE BROKER'S FEE OR SIMILAR SERVICES FOR WHICH REIMBURSEMENT IS CLAIMED UNDER OTHER CATEGORIES, CUSTOMARY COSTS OF SEARCHING TITLE, PREPARING CONVEYANCES AND OTHER INSTRUMENTS AND PREPARING CONTRACTS, RELATED NOTARY FEES, RECORDING FEES, MAKING SURVEYS, PREPARING DRAWINGS OR PLATS WHEN REQUIRED FOR LEGAL OR FINANCING PURPOSES AND SIMILAR EXPENSES MAY BE REIMBURSED EITHER WITH RESPECT TO SALE OF THE RESIDENCE AT THE OLD OFFICIAL STATION OR PURCHASE OF A DWELLING AT THE NEW OFFICIAL STATION, BUT THE SAME TYPES OF COSTS SHALL NOT BE PAID AT BOTH LOCATIONS.

SUBSECTIONS 4.1 AND 4.3A OF OMB CIRCULAR NO. A-56 REQUIRE AS A CONDITION FOR REIMBURSEMENT OF REAL ESTATE TRANSACTION EXPENSES INCURRED INCIDENT TO TRANSFER OF OFFICIAL STATION THAT SUCH EXPENSES MUST BE PAID BY THE EMPLOYEE, AND THAT EACH AMOUNT CLAIMED MUST BE SUPPORTED BY DOCUMENTATION SHOWING THAT THE EXPENSE WAS IN FACT INCURRED AND PAID BY THE EMPLOYEE.

PRIOR TO JULY 5, 1972, WE HAD CONSISTENTLY HELD THAT THE CLOSING COSTS INCIDENT TO PURCHASE OF A RESIDENCE COULD NOT BE REGARDED AS HAVING BEEN PAID BY THE PURCHASER EVEN THOUGH INCLUDED IN THE SALES PRICE; ALSO THAT WE WOULD NOT LOOK BEHIND THE PRICE OF THE REALTY. FOR SIMILAR CASES SEE 52 COMP. GEN. 11 (1972), AND CASES CITED THEREIN.

BY OUR DECISIONS IN 52 COMP. GEN. 11 (1972), AND IN B-173870, DECEMBER 8, 1972, BOTH PERTAINING TO TRANSFEREES TO THE WASHINGTON, D.C., AREA WHO PURCHASED HOUSES FROM LEVITT AND SONS, INC., IN BOWIE, MARYLAND, ALL OF THE FORMER CONTRARY HOLDINGS WERE OVERRULED. IN THESE TWO CASES REIMBURSEMENT HAD ORIGINALLY BEEN DENIED BECAUSE CLOSING COSTS HAD BEEN INCLUDED IN THE PURCHASE PRICE OF THE REAL ESTATE AND HENCE WERE NOT REGARDED AS HAVING BEEN PAID BY THE PURCHASER. UPON RECONSIDERATION, IT WAS DETERMINED THAT "THE CLOSING COSTS WHICH WERE ADDED TO THE PURCHASE PRICE ARE CLEARLY DISCERNIBLE AND SEPARABLE FROM THE PRICE ALLOCABLE TO THE REALTY", THEREFORE, THE CLAIM FOR REIMBURSEMENT OF CLOSING COSTS IN EACH INSTANCE WAS ALLOWED, AND THE DECISION HELD TO GOVERN IN FUTURE ANALOGOUS CASES.

THE CLAIMANT IN INSTANT CASE, DUE TO NO FAULT OF HIS OWN, WAS UNABLE TO OBTAIN A RECORD OF THE ACTUAL CLOSING COSTS PERTAINING TO THE PURCHASE OF HIS RESIDENCE, AS ALL PERTINENT RECORDS HAD BEEN DESTROYED BY LEVITT AND SONS, INC., AFTER A PERIOD OF TIME, APPARENTLY IN ACCORDANCE WITH THEIR CUSTOM. PRIOR TO OUR 1972 DECISIONS, THERE WOULD HAVE BEEN NO NEED FOR CLAIMANT TO HAVE REQUESTED THE RECORD OF CLOSING COSTS AS THE EARLIER DECISIONS PRECLUDED RECOVERY IN ALL CASES IN WHICH THE PURCHASE PRICE OF A HOUSE INCORPORATED THE CLOSING COSTS. HENCE, HE CLAIMANT CANNOT BE CONSIDERED TO HAVE "SLEPT ON HIS RIGHTS."

THE STATEMENT OF THE GENERAL ATTORNEY OF LEVITT AND SONS, INC., THAT "IN THE ABSENCE OF DEFINITE RECORDS, IT SEEMS TO BE THE CONSENSUS AROUND HERE THAT THE CLOSING COSTS ON THE PURCHASE OF YOUR HOUSE AMOUNTED TO APPROXIMATELY $300", REPRESENTS THE CONSIDERED OPINION OF EXPERTS IN THE FIELD WITH VAST EXPERIENCE IN SELLING REAL PROPERTY IN THE AREA UNDER THE ESTABLISHED PROCEDURE OF THE COMPANY. IN LIEU OF OTHER DOCUMENTATION OF CLOSING COSTS REQUIRED BY CURRENT REGUALTIONS, WHICH IS UNAVAILABLE, IT WOULD APPEAR THAT THE STATEMENT FURNISHED ABOVE IS THE BEST POSSIBLE EVIDENCE AVAILABLE OF THE APPROXIMATE CLOSING COSTS IN THIS TRANSACTION.

CLAIMANT HAS FURNISHED DOCUMENTATION SHOWING WHAT IS CONSIDERED THE AVERAGE CLSING COSTS FOR THE TYPE OF HOUSE PURCHASED BY HIM. ACCORDINGLY, THE CLAIM SHOULD BE ALLOWED IN THE AMOUNT CLAIMED, IF OTHERWISE CORRECT, SUBJECT TO THE DEDUCTION DISCUSSED BELOW.

THERE IS NOW ON FILE A COPY OF A VOUCHER FURNISHED BY THE CLAIMANT SHOWING THE FOLLOWING EXPENSES INCURRED BY HIM AT HIS OLD DUTY STATION INCIDENT TO THE SALE OF HIS RESIDENCE FOR WHICH HE HAS BEEN REIMBURSED:

ABSTRACT CONTINUATION $63.00

REVENUE STAMPS $11.55

SUBSECTIONS 4.2C AND 4.2D OF OMB CIRCULAR NO. A-56 PROVIDES, RESPECTIVELY, THAT THE CUSTOMARY COSTS OF SEARCHING TITLE AND FEES PAID FOR STATE AND FEDERAL REVENUE STAMPS MAY BE REIMBURSED EITHER WITH RESPECT TO THE SALE OF THE RESIDENCE AT THE OLD OFFICIAL STATION OR PRUCHASE OF A DWELLING AT THE NEW STATION, BUT THE SAME TYPES OF COSTS SHALL NOT BE PAID AT BOTH LOCATIONS.

SINCE THE CLAIMANT HAS INFORMALLY ADVISED US THAT INCIDENT TO THE PURCHASE OF HIS DWELLING AT HIS NEW DUTY STATION THERE WAS INCLUDED IN THE CLOSING COSTS A COST FOR A TITLE SEARCH AND FEES FOR REVENUE STAMPS, WHICH HE IS UNABLE TO DETERMINE THE EXACT AMOUNT AT THIS TIME, THERE SHOULD BE DEDUCTED FROM THE AMOUNT FOUND DUE THE AMOUNT HE HAS BEEN REIMBURSED FOR THE ABSTRACT CONTINUATION ($63) AND THE COSTS OF REVENUE STAMPS ($11.55).