B-176990, NOV 9, 1972

B-176990, NOV 9, 1972

CIVILIAN PERSONNEL - REAL ESTATE EXPENSES - CHANGE OF STATION DECISION DENYING THE CLAIM OF CLEMENT STORY FOR REIMBURSEMENT OF REAL ESTATE EXPENSES INCURRED IN THE SALE OF A RESIDENCE INCIDENT TO HIS CHANGE OF STATION FROM NEW ORLEANS, LA., TO CHARLESTON, S.C. OMB CIRCULAR NO. A-56, SECTION 4.1E, REQUIRES THAT A BINDING SALES CONTRACT BE ENTERED INTO WITHIN THE INITIAL ONE YEAR PERIOD. THIS PROVISION CANNOT BE WAIVED OR MODIFIED BY GAO EVEN IF EXTENUATING CIRCUMSTANCES ARE PRESENT SINCE IT HAS THE FORCE AND EFFECT OF LAW.

TO MR. CLEMENT STORY:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 17, 1972, REQUESTING RECONSIDERATION OF THE SETTLEMENT BY OUR TRANSPORTATION AND CLAIMS DIVISION ON JULY 19, 1972, DENYING YOUR CLAIM FOR REIMBURSEMENT OF REAL ESTATE EXPENSES INCURRED IN CONNECTION WITH THE SALE OF YOUR OLD RESIDENCE INCIDENT TO YOUR OFFICIAL CHANGE OF STATION FROM NEW ORLEANS, LOUISIANA, TO CHARLESTON, SOUTH CAROLINA.

THE RECORD SHOWS THAT YOU WERE ORDERED TO REPORT TO YOUR NEW DUTY STATION AT CHARLESTON, SOUTH CAROLINA, ON JUNE 14, 1970. YOU STATE THAT YOU TRIED TO SELL YOUR HOUSE BY YOURSELF PRIOR TO TURNING OVER THE SALE TO A REAL ESTATE FIRM IN MAY 1971. THIS DECISION WAS BROUGHT ABOUT BY A SUDDEN DETERIORATION OF THE NEIGHBORHOOD, A GREAT NUMBER OF HOUSES BEING OFFERED FOR SALE IN THE AREA, YOUR WIFE'S PHYSICAL COMPLICATIONS AND YOUR EXTENSIVE TEMPORARY DUTY ASSIGNMENTS DURING THE ONE-YEAR PERIOD.

YOUR CLAIM FOR REIMBURSEMENT WAS DISALLOWED BECAUSE A BINDING SALES CONTRACT WAS NOT ENTERED INTO PRIOR TO THE EXPIRATION OF THE ONE-YEAR PERIOD. YOU CONTEND THAT A BINDING SALES CONTRACT WAS IN FACT ENTERED INTO DURING THIS PERIOD.

EXPENSES INCURRED IN THE SALE OF YOUR OLD RESIDENCE MAY BE REIMBURSED UNDER OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56, REVISED JUNE 26, 1969. SECTION 4.1E OF THE CIRCULAR REQUIRES THAT:

"THE SETTLEMENT DATES FOR THE SALE *** TRANSACTIONS FOR WHICH REIMBURSEMENT IS REQUESTED ARE NOT LATER THAN ONE (INITIAL) YEAR AFTER THE DATE ON WHICH THE EMPLOYEE REPORTED FOR DUTY AT THE NEW OFFICIAL STATION, EXCEPT THAT*** AN ADDITIONAL PERIOD OF TIME NOT IN EXCESS OF ONE YEAR MAY BE AUTHORIZED OR APPROVED BY THE HEAD OF THE AGENCY OR HIS DESIGNEE WHEN HE DETERMINES THAT CIRCUMSTANCES JUSTIFYING THE EXCEPTION EXIST WHICH PRECLUDED SETTLEMENT WITHIN THE INITIAL ONE-YEAR PERIOD OF THE SALE/PURCHASE CONTRACTS *** ENTERED INTO IN GOOD FAITH BY THE EMPLOYEE WITHIN THE INITIAL ONE-YEAR PERIOD. ***"

THUS SECTION 4.1E REQUIRES THAT A BINDING SALES CONTRACT MUST BE ENTERED INTO WITHIN THE INITIAL ONE YEAR. SINCE THIS PROVISION IS ISSUED PURSUANT TO AUTHORITY CONTAINED IN 5 U.S.C. 5724A(4), IT HAS THE FORCE AND EFFECT OF LAW AND CANNOT BE WAIVED OR MODIFIED BY THIS OFFICE OR BY THE AGENCY CONCERNED. B-167518, AUGUST 8, 1969; 49 COMP. GEN. 145 (1969). THIS IS TRUE REGARDLESS OF WHETHER ANY EXTENUATING CIRCUMSTANCES MAY BE PRESENT.

THE EVIDENCE WHICH YOU HAVE SUBMITTED TO SATISFY THE ABOVE CONTRACT REQUIREMENT IS INSUFFICIENT. THE ORIGINAL AGREEMENT TO SELL EXECUTED BY YOU IS NEITHER DATED NOR SIGNED BY A BUYER. BECAUSE OF THESE DEFICIENCIES THE AGREEMENT DOES NOT CONSTITUTE A BINDING SALES CONTRACT.

THE CONTRACT SUBMITTED WITH YOUR LETTER, DATED AUGUST 17, 1972, IS NOT A SALES CONTRACT WITHIN THE MEANING OF THE CIRCULAR. THE TERM "SALES CONTRACT" IN THIS REGULATION REFERS TO A CONTRACT BETWEEN SELLER AND A BUYER WHEREBY THE SELLER AGREES TO TRANSFER PROPERTY TO THE BUYER AND THE BUYER AGREES TO PAY THE PURCHASE PRICE TO THE SELLER. THE SUBMITTED INSTRUMENT DATED MAY 24, 1971, IS A MERE LISTING AGREEMENT BETWEEN THE REAL ESTATE FIRM AND YOU, GIVING THE FIRM THE EXCLUSIVE RIGHT TO SELL YOUR HOUSE FOR A STATED SUM. IT THEREFORE APPEARS THAT THE ONLY ACTUAL SALES CONTRACT WHICH YOU ENTERED INTO IS DATED OCTOBER 27, 1971, MORE THAN ONE YEAR AFTER YOUR INITIAL REPORTING DATE.

IN VIEW OF THE FOREGOING, THE SETTLEMENT OF JULY 19, 1972, DISALLOWING YOUR CLAIM FOR REIMBURSEMENT OF REAL ESTATE EXPENSES, MUST BE SUSTAINED.