B-175967, JUL 11, 1972

B-175967, JUL 11, 1972

CIVILIAN EMPLOYEE - LEASE TERMINATION COSTS - REIMBURSEMENT CONCERNING THE PROPRIETY OF LEASE TERMINATION COSTS INCURRED BY DOREEN W. HOPKINS INCIDENT TO A CHANGE OF OFFICIAL STATION AS AN EMPLOYEE OF THE OFFICE OF ECONOMIC OPPORTUNITY. IT APPEARS THAT THE AMOUNTS PAID BY MISS HOPKINS WERE USED BY THE LESSOR IN ACCORDANCE WITH THE FORFEITURE CLAUSE IN THE LEASE AND THE LEASE TERMINATION AGREEMENT. ACCORDINGLY, REIMBURSEMENT IS AUTHORIZED PURSUANT TO SECTION 4.2F OF OMB CIRCULAR NO. A-56.

TO MISS ANNORA F. FRAASA:

REFERENCE IS MADE TO YOUR LETTER DATED MAY 10, 1972, WITH ENCLOSURES, REQUESTING AN ADVANCE DECISION AS TO WHETHER THE ENCLOSED VOUCHER IN THE AMOUNT OF $534 IN FAVOR OF MISS DOREEN W. HOPKINS, AN EMPLOYEE OF THE OFFICE OF ECONOMIC OPPORTUNITY, MAY BE CERTIFIED FOR PAYMENT UNDER THE CIRCUMSTANCES HEREINAFTER RELATED IN VIEW OF SECTION 4.2F OF OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR NO. A-56, REVISED JUNE 26, 1969.

THE RECORD INDICATES THAT MISS HOPKINS WAS AUTHORIZED A CHANGE OF OFFICIAL STATION FROM CHICAGO, ILLINOIS, TO PHILADELPHIA, PENNSYLVANIA, UNDER TRAVEL AUTHORIZATION NO. P2L 8002, DATED AUGUST 5, 1971. INCIDENT TO THIS TRANSFER SHE WAS TO BE ACCORDED THOSE RELOCATION BENEFITS CONTAINED IN THE ABOVE-REFERENCED CIRCULAR.

THE RECORD FURTHER SHOWS THAT WHILE STATIONED AT THE OLD DUTY STATION MISS HOPKINS HAD ENTERED INTO A LEASE AGREEMENT WITH INVESTORS REALTY & MANAGEMENT CORPORATION FOR AN APARTMENT WHICH INVOLVED A SECURITY DEPOSIT OF $204 AND A MONTHLY RENTAL IN THE SAME AMOUNT. THIS AGREEMENT COMMENCED ON OCTOBER 1, 1970, AND WAS TO TERMINATE ON SEPTEMBER 30, 1972.

SINCE AT THE EFFECTIVE DATE OF MISS HOPKINS' TRANSFER THERE STILL REMAINED AN UNEXPIRED PERIOD OF TIME UNDER THE LEASE, IT THUS BECAME NECESSARY FOR HER TO SEEK TERMINATION OF HER OUTSTANDING OBLIGATIONS UNDER THAT AGREEMENT. ON AUGUST 23, 1971, MISS HOPKINS ENTERED INTO AN AGREEMENT WITH THE RENTAL AGENCY WHICH STATED IN PART THAT -

"I HEREWITH TENDER TO YOU, AS AGENTS OF LESSOR, $204.00, AND THE FORFEITURE OF MY SECURITY DEPOSIT, TO CONSTITUTE CONSIDERATION FOR

"(1) FINDING OF NEW TENANT;

"(2) YOUR ASSUMPTION OF RISK OF RENT LOSS UNTIL NEW TENANT IS FOUND;

"(3) YOUR ASSUMPTION OF RISK RELATING TO SOLVENCY AND FINANCIAL RELIABILITY OF NEW TENANT;

"(4) YOUR ACCEPTANCE OF POSSIBLE ADVERTISING COSTS NEEDED TO ATTRACT A NEW TENANT;

"(5) YOUR ASSUMPTION OF POSSIBLE COSTS RELATING TO REDECORATING, REHANDLING, AND PAPER PROCESSING;

"(6) TERMINATION OF MY RENTAL LEASE AGREEMENT ORIGINALLY DRAWN UP UNDER DATE OF 10/1/70 AND INTENDED TO TERMINATE AS OF 9/30/72."

WITH REGARD TO THE MATTER HERE INVOLVED, YOU HAVE INDICATED THAT A QUESTION EXISTS CONCERNING APPROVAL OF THE CLAIM FOR $408 REPRESENTING HER ALLEGED LEASE TERMINATION COSTS.

SECTION 4.2F OF OMB CIRCULAR NO. A-56 PROVIDES AS FOLLOWS:

"F. SETTLEMENT OF AN UNEXPIRED LEASE. EXPENSES INCURRED FOR SETTLING AN UNEXPIRED LEASE (INCLUDING MONTH-TO-MONTH RENTAL) ON RESIDENCE QUARTERS OCCUPIED BY THE EMPLOYEE AT THE OLD OFFICIAL STATION MAY INCLUDE BROKER'S FEES FOR OBTAINING A SUBLEASE OR CHARGES FOR ADVERTISING AN UNEXPIRED LEASE. SUCH EXPENSES ARE REIMBURSABLE WHEN (1) APPLICABLE LAWS OR THE TERMS OF THE LEASE PROVIDE FOR PAYMENT OF SETTLEMENT EXPENSES, (2) SUCH EXPENSES CANNOT BE AVOIDED BY SUBLEASE OR OTHER ARRANGEMENT, (3) THE EMPLOYEE HAS NOT CONTRIBUTED TO THE EXPENSE BY FAILING TO GIVE APPROPRIATE LEASE TERMINATION NOTICE PROMPTLY AFTER HE HAS DEFINITE KNOWLEDGE OF THE PROPOSED TRANSFER, AND (4) THE BROKER'S FEES OR ADVERTISING CHARGES ARE NOT IN EXCESS OF THOSE CUSTOMARILY CHARGED FOR COMPARABLE SERVICES IN THAT LOCALITY. ITEMIZATION OF THESE EXPENSES IS REQUIRED AND THE TOTAL AMOUNT WILL BE ENTERED ON AN APPROPRIATE TRAVEL VOUCHER. THIS VOUCHER MAY BE SUBMITTED SEPARATELY OR WITH A CLAIM THAT IS TO BE MADE FOR EXPENSES INCIDENT TO THE PURCHASE OF A DWELLING. EACH ITEM MUST BE SUPPORTED BY DOCUMENTATION SHOWING THAT THE EXPENSE WAS IN FACT INCURRED AND PAID BY THE EMPLOYEE."

WE NOTE THAT THE LEASE SPECIFICALLY (IN PARAGRAPHS 2 AND 7) FORBADE THE TENANT TO SUBLEASE THE APARTMENT AND THAT NO PROVISION AT ALL WAS MADE FOR THE GIVING OF NOTICE IN THE EVENT OF PREMATURE TERMINATION.

WE ALSO NOTE THAT THE LEASE AGREEMENT ENTERED INTO BY MISS HOPKINS STATED, IN CONNECTION WITH THE SECURITY DEPOSIT, THAT -

"*** LESSOR MAY USE SAID SECURITY DEPOSIT FUND FOR AND IN THE EVENT OF A BREACH OF THIS LEASE TO SATISFY ALL RENTS AND DAMAGES SUFFERED BY THE LESSOR IN THE COURSE OF SAID BREACH. ***"

BASED UPON THE FOREGOING, IT IS OUR VIEW THAT THE SECURITY DEPOSIT OF $204 AND THE ADDITIONAL SUM OF $204 WERE USED BY THE LESSOR PURSUANT TO BOTH THE ABOVE-QUOTED FORFEITURE CLAUSE IN THE LEASE AND THE AGREEMENT OF AUGUST 23, 1971, FOR THE PURPOSE OF TERMINATION OF SUCH LEASE.

ACCORDINGLY, REIMBURSEMENT OF THE $408 IS AUTHORIZED PURSUANT TO THE ABOVE-CITED SECTION 4.2F OF CIRCULAR NO. A-56.

THE VOUCHER, WITH ACCOMPANYING PAPERS, IS RETURNED HEREWITH AND MAY BE CERTIFIED FOR PAYMENT IF OTHERWISE PROPER.