B-171560, JAN 22, 1971

B-171560, JAN 22, 1971

TRANSFERS - INCIDENTAL EXPENSES - ADVERTISING EXPENSES DISALLOWING CLAIM BY CHARLES A. AUBE FOR REIMBURSEMENT OF ADVERTISING EXPENSES INCURRED INCIDENT TO THE SALE OF HIS RESIDENCE AT HIS OLD DUTY STATION, PROVIDENCE, R.I., AND TRANSFER TO HARTFORD, CONN. WHERE CLAIMANT REQUESTED NEWSPAPER ADVERTISING IN ADDITION TO THAT PROVIDED BY THE REAL ESTATE AGENT, SECTION 4.2(B), BOB CIR. NO. A-56 PROHIBITS REIMBURSEMENT FOR SUCH EXPENSES IF THE EMPLOYEE HAS PAID FOR SUCH SERVICES IN THE FORM OF A BROKER'S FEE OR REAL ESTATE AGENT'S COMMISSION. THEREFORE IN THE ABSENCE OF A SHOWING OF A CUSTOM THAT THE AGENT CHARGED LESS THAN THE CUSTOMARY FEE IN CONSIDERATION OF THE EMPLOYEE'S PAYING ADVERTISING OR OTHER COSTS, THE FEE PAID THE AGENT IS PRESUMED TO REPRESENT FULL PAYMENT FOR ALL COSTS AND SERVICES CONNECTED WITH THE SALE OF THE RESIDENCE, AND THE CLAIM IS THEREFORE DISALLOWED.

TO MR. JOHN C. MACKALL:

THIS REFERS TO YOUR LETTER OF DECEMBER 14, 1970, WITH ENCLOSURES, REQUESTING AN ADVANCE DECISION AS TO THE PROPRIETY OF CERTIFYING FOR PAYMENT THE VOUCHER OF MR. CHARLES A. AUBE IN THE AMOUNT OF $104.16 COVERING REIMBURSEMENT OF ADVERTISING EXPENSES INCURRED INCIDENT TO THE SALE OF HIS RESIDENCE AT HIS OLD OFFICIAL DUTY STATION.

THE INFORMATION FURNISHED SHOWS THAT MR. AUBE WAS TRANSFERRED FROM PROVIDENCE, RHODE ISLAND, TO HARTFORD, CONNECTICUT. IN PROCESSING HIS CLAIM FOR REIMBURSEMENT OF REAL ESTATE EXPENSES INCURRED IN THE SALE OF HIS FORMER RESIDENCE, THE SUM OF $104.16 FOR ADVERTISING EXPENSE WAS DISALLOWED. THE DISALLOWANCE WAS BASED ON SECTION 4.2B OF BUREAU OF THE BUDGET CIRCULAR NO. A-56, REVISED JUNE 26, 1969, AND THE DESCRIPTIVE STATEMENT OF ITEM 2 ON EMPLOYEE APPLICATION FOR REIMBURSEMENT OF EXPENSES INCURRED UPON SALE OR PURCHASE (OR BOTH) OF RESIDENCE UPON CHANGE OF OFFICIAL STATION. ITEM 2 REFERRED TO ABOVE PROVIDES:

"2. ADVERTISING: EXPENSES PAID FOR NEWSPAPER AND OTHER ADVERTISING WHEN A DIRECT SALE IS MADE WITHOUT THE SERVICES OF A REAL ESTATE BROKER OR REAL ESTATE AGENT"

SECTION 4.2 OF THE GOVERNING STATUTORY REGULATIONS, BUREAU OF THE BUDGET CIRCULAR NO. A-56, REVISED JUNE 26, 1969, PROVIDES IN PART FOR REIMBURSEMENT OF THE FOLLOWING EXPENSES INCURRED IN CONNECTION WITH RESIDENCE TRANSACTIONS:

"A. BROKER'S FEES AND REAL ESTATE COMMISSIONS. A BROKER'S FEE OR REAL ESTATE COMMISSION PAID BY THE EMPLOYEE FOR SERVICES IN SELLING HIS RESIDENCE IS REIMBURSABLE BUT NOT IN EXCESS OF RATES GENERALLY CHARGED FOR SUCH SERVICES BY THE BROKER OR BY BROKERS IN THE LOCALITY OF THE OLD OFFICIAL STATION. NO SUCH FEE OR COMMISSION IS REIMBURSABLE IN CONNECTION WITH THE PURCHASE OF A HOME AT THE NEW OFFICIAL STATION.

"B. OTHER ADVERTISING AND SELLING EXPENSES. COST OF NEWSPAPER, BULLETIN BOARD, MULTIPLE-LISTING SERVICES, OR OTHER ADVERTISING FOR SALE OF THE RESIDENCE AT THE OLD OFFICIAL STATION ARE REIMBURSABLE IF THE EMPLOYEE HAS NOT PAID FOR SUCH SERVICES IN THE FORM OF A BROKER'S FEE OR REAL ESTATE AGENT'S COMMISSION. THE CUSTOMARY COST OF AN APPRAISAL ALSO MAY BE REIMBURSED."

MR. AUBE PAID THE REAL ESTATE COMMISSION AND WAS REIMBURSED THE AMOUNT OF SUCH FEE. YOU SAY THAT THE PARTICULAR ADVERTISING IN QUESTION WAS NOT INCLUDED IN THE AGENT'S COMMISSION, HOWEVER, YOU HAVE BEEN ADVISED BY THE REAL ESTATE COMPANY HANDLING THE SALE THAT ALL EXCLUSIVE LISTINGS ARE GIVEN NORMAL COVERAGE IN NEWSPAPER ADVERTISING. MR. AUBE SAID THE REASON HE REQUESTED THE ADDITIONAL NEWSPAPER ADVERTISEMENT WAS BECAUSE THE HOUSE HAD BEEN ON THE MARKET FOR 2-1/2 MONTHS AND THERE WERE NO PROSPECTS. SECTION 4.2B, QUOTED ABOVE, PERMITS REIMBURSEMENT OF COSTS INCURRED FOR ADVERTISING WHEN SUCH COSTS HAVE NOT BEEN PAID FOR BY THE EMPLOYEE IN THE FORM OF A BROKER'S FEE OR REAL ESTATE AGENT'S COMMISSION.

THE AGREEMENT BETWEEN MR. AUBE AND THE REAL ESTATE AGENT DID NOT REQUIRE THE AGENT TO ADVERTISE THE PROPERTY BUT DID PERMIT THE AGENT TO LIST THE PROPERTY WITH THE MULTIPLE-LISTING SERVICE OF WHICH THE AGENT APPARENTLY WAS A MEMBER. IN THE ABSENCE OF A SHOWING OF A CUSTOM TO THE CONTRARY PREVAILING IN THE AREA THAT THE AGENT IS CHARGING LESS THAN THE CUSTOMARY FEE IN CONSIDERATION OF THE EMPLOYEE'S PAYING ADVERTISING OR OTHER COSTS, THE FEE PAID THE AGENT IS PRESUMED TO REPRESENT FULL PAYMENT FOR ALL COSTS AND SERVICES CONNECTED WITH THE SALE OF THE RESIDENCE.

ACCORDINGLY, THE VOUCHER WHICH IS RETURNED HEREWITH MAY NOT BE CERTIFIED FOR PAYMENT.