B-215819, NOV 28, 1984, OFFICE OF GENERAL COUNSEL

B-215819, NOV 28, 1984, OFFICE OF GENERAL COUNSEL

OFFICERS AND EMPLOYEES - TRANSFERS - REAL ESTATE EXPENSES - TIME LIMITATION - EXTENSION DIGEST: THE EMPLOYEE TRANSFERRED ON SEPTEMBER 13, 1981, AND HIS MAXIMUM TIME LIMITATION FOR SETTLEMENT OF A REAL ESTATE PURCHASE HAD BEEN EXTENDED TO SEPTEMBER 13, 1983. SINCE THE TIME LIMITATION HAD NOT EXPIRED ON THE EFFECTIVE DATE OF THE FEDERAL TRAVEL REGULATION AMENDMENT INCREASING THE MAXIMUM PERIOD TO 3 YEARS, THE EMPLOYING AGENCY SHOULD CONSIDER EXTENDING THE PERIOD THROUGH THE THIRD ANNIVERSARY (SEPTEMBER 13, 1984) OF HIS REPORTING DATE AT HIS NEW DUTY STATION. ALTHOUGH EMPLOYEE SETTLED A LOT PURCHASE AND CONTRACTED FOR RESIDENCE CONSTRUCTION, HE MUST PROVE HIS ACCEPTANCE OF FINISHED CONSTRUCTION AND OCCUPANCY, AS WELL AS OTHERWISE COMPLETING PROPERTY TRANSFER WITHIN THE 3-YEAR PERIOD. OTHERWISE HE IS NOT ENTITLED TO REIMBURSEMENT OF REAL ESTATE EXPENSES FOR EITHER SETTLEMENT OF THE LOT OR BUILDING THE RESIDENCE.

MR. JAMES K. LYNN FINANCE AND ACCOUNTING OFFICER DEPARTMENT OF THE ARMY SAVANNAH DISTRICT CORPS OF ENGINEERS P.O. BOX 889 SAVANNAH, GEORGIA 31402

DEAR MR. LYNN:

YOUR REQUEST OF MARCH 30, 1984, FOR A RULING ON THE REAL ESTATE EXPENSE CLAIM OF ELTON L. COBB WAS FORWARDED TO US BY TRANSMITTAL LETTER RECEIVED JULY 16, 1984, FROM THE CHIEF, FINANCE AND ACCOUNTING DIVISION, DIRECTORATE OF RESOURCE MANAGEMENT, OFFICE OF THE CHIEF OF ENGINEERS, DEPARTMENT OF THE ARMY.

BECAUSE THE MAXIMUM TIME LIMITATION FOR REAL ESTATE SETTLEMENT APPLICABLE IN MR. COBB'S CASE WAS EXTENDED TO 3 YEARS WE ARE RETURNING THE CLAIM FOR CONSIDERATION OF WHETHER THE FULL 3 YEARS SHOULD BE ALLOWED. A DECISION OF THE COMPTROLLER GENERAL IS NOT FURNISHED AT THIS TIME.

FACTUAL BACKGROUND

MR. COBB, A CIVILIAN EMPLOYEE OF THE CORPS OF ENGINEERS, TRANSFERRED FROM TYNDALL AIR FORCE BASE, FLORIDA, TO ROBINS AIR FORCE BASE, GEORGIA, WHERE HE REPORTED FOR DUTY ON SEPTEMBER 13, 1981. HE REQUESTED AN EXTENSION OF THE PERIOD FOR SETTLING REAL ESTATE TRANSACTIONS IN ORDER TO BE ENTITLED TO REIMBURSEMENT OF REAL ESTATE EXPENSES INCURRED INCIDENT TO THE TRANSFER. AN EXTENSION WAS GRANTED THROUGH SEPTEMBER 13, 1983. INCURRED SETTLEMENT COSTS OF $153 ON AUGUST 25, 1983, WHEN HE PURCHASED A LOT ON WHICH HE PLANNED TO CONSTRUCT A RESIDENCE. HOWEVER, HE DID NOT ENTER INTO A CONSTRUCTION CONTRACT UNTIL JANUARY 10, 1984, NEARLY 4 MONTHS AFTER THE EXTENSION DATE GRANTED FOR REAL ESTATE SETTLEMENTS HAD EXPIRED. ALTHOUGH THE CONTRACT STATES THAT CONSTRUCTION OF THE RESIDENCE WAS TO BE SUBSTANTIALLY COMPLETED 1 MONTH PLUS 120 DAYS AFTER THE CONTRACT WAS SIGNED, THE RECORD BEFORE US DOES NOT INDICATE THE DATE WHEN MR. COBB ACCEPTED AND OCCUPIED THE COMPLETED RESIDENCE.

MR. COBB BELIEVES REIMBURSEMENT OF THE $153 FOR THE LOT SETTLEMENT IS JUSTIFIED BECAUSE HE PURCHASED IT WITHIN THE EXTENDED TIME PERIOD TO SETTLE REAL ESTATE TRANSACTIONS AND HE DID SO WITH THE INTENT TO CONSTRUCT A RESIDENCE. THE CORPS OF ENGINEERS, ON THE OTHER HAND, DENIED THE CLAIM ON THE BASIS THE THE PURCHASER OF A LOT MUST SHOW THAT THERE IS A HOME ON THE LOT AND THAT THIS IS HIS RESIDENCE FROM WHICH HE REGULARLY COMMUTES TO AND FROM WORK. IT ALSO STATES THAT MR. COBB HAD NOT CONTRACTED TO BUILD A HOME ON THE LOT BEFORE THE EXTENDED TIME PERIOD FOR A REAL ESTATE SETTLEMENT HAD EXPIRED.

THREE-YEAR SETTLEMENT PERIOD

THE MAXIMUM TIME PERIOD FOR SETTLING THE SALE AND PURCHASE OF A RESIDENCE HAS BEEN INCREASED TO 3 YEARS (2 YEARS AND A 1-YEAR EXTENSION AT THE DISCRETION OF THE AGENCY HEAD OR DESIGNEE) AFTER THE EMPLOYEE TRANSFERS.

THE GENERAL SERVICES ADMINISTRATION (GSA) ANNOUNCED THE NEW 3-YEAR PERIOD IN GAS BULLETIN FPMR A-40, SUPPLEMENT 4, AUGUST 23, 1982, AMENDING PARAGRAPH 2-6.1E OF THE FEDERAL TRAVEL REGULATIONS, FPMR 101-7 (SEPTEMBER 1981). THE AMENDMENT APPLIED THE NEW 3-YEAR PERIOD TO EMPLOYEES WHOSE 2- YEAR PERIOD HAD NOT EXPIRED PRIOR TO THE AUGUST 23, 1982 ISSUANCE DATE. THUS, IT APPLIED TO MR. COBB BECAUSE HIS 2-YEAR ENTITLEMENT PERIOD ENDED SEPTEMBER 13, 1983. SEE FTR PARAGRAPH 2 6.1E(2), AS ADDED BY SUPPLEMENT 4. CONSEQUENTLY, MR. COBB COULD HAVE BEEN GRANTED AN EXTENSION TO SEPTEMBER 13, 1984, TO SETTLE ON HIS NEW RESIDENCE.

ORDINARILY, THE EMPLOYEE SHOULD SUBMIT THE WRITTEN REQUEST FOR AN EXTENSION BEFORE THE 2-YEAR PERIOD EXPIRES OR WITHIN 30 CALENDAR DAYS THEREAFTER. HOWEVER, THE EMPLOYING AGENCY MAY ALLOW MORE THAN 30 DAYS. SEE FTR PARAGRAPH 2-6.1E(2)(B), AS AMENDED BY SUPPLEMENT 4.

THE COMPTROLLER GENERAL HAS HELD THAT THE EMPLOYING AGENCY HAD A DUTY TO NOTIFY RECENTLY TRANSFERRED EMPLOYEES OF THE AVAILABLE THIRD YEAR EXTENSION SO THAT THEY WOULD HAVE AN OPPORTUNITY TO SUBMIT REQUESTS FOR EXTENSIONS. FURTHER, EVEN THOUGH THE 30-DAY PERIOD FOR REQUESTING AN EXTENSION EXPIRES, THE EMPLOYING AGENCY SHOULD IN EACH INDIVIDUAL CASE CONSIDER A LATER REQUEST. SARA B. HARRIS, B-212171, SEPTEMBER 27, 1983.

SETTLEMENT DATE UNKNOWN

IF THE EMPLOYEE ACQUIRES A LOT AND BUILDS A RESIDENCE, THE COMPTROLLER GENERAL HAS VIEWED THE LOT PURCHASE AND THE RESIDENCE CONSTRUCTION TO BE A SINGLE TRANSACTION. DECISIONS HOLD THAT THE EMPLOYEE FAILS TO MEET THE SETTLEMENT TIME LIMITATIONS BY PURCHASE AND SETTLEMENT OF THE LOT, OR EVEN AGREEMENT WITH THE CONTRACTOR TO BUILD THE RESIDENCE WITHIN THE PRESCRIBED PERIOD. SETTLEMENT IS CONSIDERED TO OCCUR WHEN THE EMPLOYEE ACCEPTS THE COMPLETED CONSTRUCTION AND MOVES IN. SEE B-164044, JUNE 7, 1968; B-164452, JULY 2, 1968. BUT SEE, B-165577, JANUARY 6, 1969. B-166317, MAY 9, 1969. ALSO, 47 COMP.GEN. 792, IN WHICH SETTLEMENT WAS NOT CONSIDERED TO HAVE OCCURRED EVEN THOUGH THE EMPLOYEE HAD MOVED INTO A NEW RESIDENCE.

AGENCY ACTION

IF YOU DECIDE THAT MR. COBB HAS AN ADEQUATE REASON FOR AN EXTENSION, AND THE CONDITIONS IN THE HARRIS CASE ARE MET, AN EXTENSION MAY BE GRANTED. IN THAT CASE MR. COBB SHOULD BE PERMITTED TO SUBMIT DOCUMENTATION SHOWING WHETHER SETTLEMENT OF THE RESIDENCE OCCURRED BY SEPTEMBER 13, 1984, THE THIRD ANNIVERSARY OF HIS REPORTING DATE AT ROBINS AIR FORCE BASE UNDER THE RULES DISCUSSED ABOVE.

WE ARE RETURNING THE CLAIM FOR FURTHER CONSIDERATION IN LIGHT OF THE CHANGED REGULATION EXTENDING THE MAXIMUM TIME LIMITATION AND THE ENCLOSED DECISIONS DISCUSSED ABOVE. WE REGARD THIS CASE CLOSED SUBJECT TO REOPENING IF YOU CONSIDER ANY FURTHER ISSUE IS UNRESOLVED.