B-173870, AUG 30, 1971
Highlights
THE DENIAL OF THE CLAIM WAS PROPER. THE DISALLOWANCE OF YOUR CLAIM WAS PREDICATED ON THE FACT THAT THE RECORD SHOWED SUCH COSTS WERE INCLUDED IN THE PURCHASE PRICE OF YOUR RESIDENCE AND WERE PAID BY THE SELLER. REGARDLESS OF THE FACT THAT THE PURCHASE PRICE MAY HAVE BEEN INCREASED TO COVER THE CLOSING COSTS. THERE WAS NO BASIS FOR TREATING ANY PART OF THAT PRICE AS OTHER THAN THE PRICE OF THE REALTY. YOU FURNISH A BREAKDOWN OF THE CLOSING COSTS OF $477.11 FROM LEVITT AND SONS BUILDERS FROM WHOM YOU PURCHASED YOUR HOME WHICH READS IN PART AS FOLLOWS: "IN REFERENCE TO THE PLACEMENT OF YOUR MORTGAGE LOAN THE FOLLOWING IS A COMPLETE BREAKDOWN OF COSTS INCURRED BY LEVITT AND SONS. ARE INCLUDED IN THE SALES PRICE OF YOUR HOME.
B-173870, AUG 30, 1971
CIVILIAN EMPLOYEE - PURCHASE OF RESIDENCE - CLOSING COSTS DECISION SUSTAINING THE DENIAL OF A CLAIM FOR REIMBURSEMENT OF CLOSING COSTS INCIDENT TO THE PURCHASE OF A RESIDENCE AT BOWIE, MARYLAND, AS AN EMPLOYEE OF THE CIVIL SERVICE COMMISSION. UNDER THE PROVISIONS OF 5 U.S.C. 5724AA) AND SECTION 4 OF OMB CIRCULAR A- 56, CLAIMANT MAY NOT BE REIMBURSED FOR COSTS INCLUDED AS A PART OF THE PURCHASE PRICE. ACCORDINGLY, THE DENIAL OF THE CLAIM WAS PROPER.
TO MR. HENRI W. BARON:
WE REFER TO YOUR LETTER OF AUGUST 6, 1971, WITH ENCLOSURES, REQUESTING RECONSIDERATION OF OUR OFFICE SETTLEMENT DATED JUNE 18, 1971, WHICH DISALLOWED YOUR CLAIM FOR REIMBURSEMENT OF CLOSING COSTS INCIDENT TO THE PURCHASE OF YOUR RESIDENCE AT BOWIE, MARYLAND, AS AN EMPLOYEE OF THE CIVIL SERVICE COMMISSION.
THE DISALLOWANCE OF YOUR CLAIM WAS PREDICATED ON THE FACT THAT THE RECORD SHOWED SUCH COSTS WERE INCLUDED IN THE PURCHASE PRICE OF YOUR RESIDENCE AND WERE PAID BY THE SELLER. WE INDICATED IN OUR SETTLEMENT LETTER THAT, REGARDLESS OF THE FACT THAT THE PURCHASE PRICE MAY HAVE BEEN INCREASED TO COVER THE CLOSING COSTS, THERE WAS NO BASIS FOR TREATING ANY PART OF THAT PRICE AS OTHER THAN THE PRICE OF THE REALTY.
YOU FURNISH A BREAKDOWN OF THE CLOSING COSTS OF $477.11 FROM LEVITT AND SONS BUILDERS FROM WHOM YOU PURCHASED YOUR HOME WHICH READS IN PART AS FOLLOWS:
"IN REFERENCE TO THE PLACEMENT OF YOUR MORTGAGE LOAN THE FOLLOWING IS A COMPLETE BREAKDOWN OF COSTS INCURRED BY LEVITT AND SONS, INCORPORATED, WHICH, ACCORDING TO THE FEDERAL TRUTH IN LENDING ACT, ARE INCLUDED IN THE SALES PRICE OF YOUR HOME. CLOSING COSTS ARE PAID AT TIME OF SETTLEMENT FROM PURCHASER'S DEPOSIT WITH SELLER AT TIME OF CONTRACT."
WHILE LEVITT AND SONS FURNISHED A BREAKDOWN SHOWING THE CLOSING COSTS THEY ALSO STATED THAT SUCH COSTS ARE INCLUDED IN THE SALES PRICE OF YOUR HOME.
THE ONLY QUESTION FOR CONSIDERATION IS WHETHER UNDER THE PROVISIONS OF 5 U.S.C. 5724AA) AND SECTION 4 OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56 YOU MAY BE REIMBURSED COSTS INVOLVED IN THE PURCHASE OF YOUR RESIDENCE WHICH WAS INCLUDED IN THE SALE PRICE OF THE RESIDENCE. IN YOUR CASE THE AGREED SALE PRICE INCLUDED THE $477.11 CLOSING COSTS AND YOU THEREFORE PAID NO COST WHICH WOULD OTHERWISE BE ALLOWABLE UNDER SECTION 4 OF CIRCULAR NO. A-56, OR THE CONTROLLING STATUTE. SEE B-165841, JANUARY 22, 1969, AND B-171440, MARCH 3, 1971, COPIES ENCLOSED.
ACCORDINGLY, WE MUST SUSTAIN THE ACTION TAKEN IN OUR SETTLEMENT OF JUNE 18, 1971, IN DISALLOWING YOUR CLAIM.