B-63340, FEBRUARY 11, 1947, 26 COMP. GEN. 585

B-63340, FEBRUARY 11, 1947, 26 COMP. GEN. 585

REPAIRS AND IMPROVEMENTS - RESTORATION OF PREMISES OCCUPIED ON RENT-FREE BASIS UPON THE SURRENDER OF PREMISES OCCUPIED BY LOCAL SELECTIVE SERVICE BOARDS RENT FREE AND WITHOUT FORMAL AGREEMENTS OR LEASES IN STATE, COUNTY, MUNICIPAL OR PRIVATELY OWNED BUILDINGS, THE SELECTIVE SERVICE SYSTEM MAY MAKE NECESSARY REPAIRS INCIDENT TO DAMAGES CAUSED BY THE ACTS OR NEGLIGENCE OF GOVERNMENT EMPLOYEES OR AGENTS, SO AS TO RESTORE THE PREMISES TO THE SAME CONDITION EXISTING AT THE BEGINNING OF THE TENANCY; HOWEVER, THERE IS NO AUTHORITY TO MAKE REPAIRS INCIDENT TO REASONABLE AND ORDINARY WEAR AND TEAR. IN ACCORDANCE WITH THE GENERAL RULE THAT, IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY TO THE CONTRARY, ONE AGENCY MAY NOT CHARGE FOR THE USE, DEPRECIATION OR DAMAGE OF REAL OR PERSONAL PROPERTY LOANED TO ANOTHER AGENCY, THE SELECTIVE SERVICE SYSTEM MAY NOT, UPON SURRENDER OF QUARTERS ASSIGNED TO LOCAL SELECTIVE SERVICE BOARDS IN FEDERAL BUILDINGS UNDER THE ADMINISTRATIVE CONTROL OF ANOTHER AGENCY, MAKE REPAIRS TO SUCH QUARTERS IN ORDER TO RESTORE THEM TO THE SAME GENERAL CONDITIONS EXISTING AT THE TIME OF ASSIGNMENT THERETO. WHERE THE AGREEMENTS UNDER WHICH PREMISES WERE FURNISHED TO LOCAL SELECTIVE SERVICE BOARDS RENT FREE PROVIDE FOR NOTICE OF DEMAND FOR RESTORATION UPON VACATING THE PREMISES, THE GOVERNMENT'S OBLIGATION TO MAKE REPAIRS OR TO RESTORE WOULD DEPEND UPON THE TERMS OF THE AGREEMENTS, AND SUBSTANTIAL COMPLIANCE THEREWITH WOULD CONSTITUTE A CONDITION PRECEDENT TO THE RIGHT OF RECOVERY FOR ANY DAMAGES FOR WHICH THE GOVERNMENT OTHERWISE MIGHT BE LIABLE; HOWEVER, GENERALLY, IN THE ABSENCE OF SUCH NOTICE REQUIREMENTS, THE PREMISES MAY BE RESTORED OR REPAIRED OR PAYMENTS MADE IN LIEU THEREOF WHERE NOTICE OF DEMAND, WRITTEN OR ORAL, IS GIVEN WITHIN A REASONABLE TIME AFTER NOTICE OF TERMINATION. GENERALLY, RESTORATION AT GOVERNMENT EXPENSE OF PREMISES FORMERLY OCCUPIED BY LOCAL SELECTIVE SERVICE BOARDS RENT FREE WOULD NOT BE PRECLUDED BY FAILURE OF THE OWNERS TO GIVE NOTICE OF DEMAND FOR RESTORATION PRIOR TO TERMINATION OF THE OCCUPANCY, IF NOTICE WERE GIVEN WITHIN A REASONABLE TIME AFTER THE PREMISES WERE VACATED AND IF THE FAILURE TO GIVE NOTICE IN THE MEANTIME DID NOT AFFECT THE MERITS OF THE CLAIM FOR RESTORATION OR OPERATE TO THE PREJUDICE OF THE UNITED STATES. THE RESTORATION OF PREMISES OCCUPIED BY LOCAL SELECTIVE SERVICE BOARDS RENT FREE, UPON TERMINATION, OF THE OCCUPANCY, IS NOT TO BE CONSIDERED AS "REPAIRS, IMPROVEMENTS, OR ALTERATIONS" WITHIN THE MEANING OF SECTION 322 OF THE ECONOMY ACT, SO THAT THE PERCENTAGE RESTRICTION THEREIN AS TO THE AMOUNT THAT MAY BE EXPENDED FOR REPAIRS, ETC., IS NOT APPLICABLE.

COMPTROLLER GENERAL WARREN TO THE DIRECTOR, SELECTIVE SERVICE SYSTEM, FEBRUARY 11, 1947:

I HAVE YOUR LETTER OF JANUARY 28, 1947 (YOUR FILE 9-60A-1), AS FOLLOWS:

ON APRIL 4, 1942, IN OPINION B-24133, 21 COMP. GEN. 906, YOU ADVISED THIS OFFICE AS FOLLOWS:

1. THE LIMITATIONS OF SECTION 322 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, ARE APPLICABLE TO PREMISES OCCUPIED RENT FREE OR AT A NOMINAL RENTAL WHERE THE AMOUNT PROPOSED TO BE EXPENDED FOR SUCH ALTERATIONS, IMPROVEMENTS, AND REPAIRS, PLUS THE NOMINAL RENT, EXCEEDS $2,000.

2. IN DETERMINING THE MAXIMUM AMOUNTS THAT MAY BE EXPENDED FOR ALTERATIONS, IMPROVEMENTS, AND REPAIRS TO PREMISES OCCUPIED RENT FREE, OR AT A NOMINAL RENTAL, IT IS NOT NECESSARY IN ALL CASES TO COMPUTE SUCH AMOUNTS BY TAKING ONE-FOURTH OF 15 PERCENTUM OF THE FAIR MARKET VALUE OF THE PREMISES OCCUPIED. SINCE THE COST OF THE ALTERATIONS, IMPROVEMENTS, AND REPAIRS IN SUCH A CASE IS TO BE REGARDED AS RENT, THE TOTAL AMOUNT THEREOF PLUS ANY NOMINAL RENT MUST NOT EXCEED 15 PERCENTUM OF THE FAIR MARKET VALUE OF THE PREMISES UNLESS SUCH TOTAL COST PLUS THE NOMINAL RENT DOES NOT EXCEED $2,000.

THE ABOVE OPINION INVOLVES THE BASIC ASSUMPTION THAT THE PREMISES TO BE ALTERED, IMPROVED OR REPAIRED WOULD CONTINUE TO BE OCCUPIED FOR GOVERNMENT PURPOSES. AT THE PRESENT TIME, DUE TO A RECENT GROUPING OF SELECTIVE SERVICE LOCAL BOARDS, SOME OF THE QUARTERS PREVIOUSLY OCCUPIED BY FIELD OFFICES OF THIS AGENCY HAVE ALREADY BEEN SURRENDERED, AND WE HAVE RECEIVED REQUESTS TO REDECORATE THOSE PREMISES WHICH HAVE BEEN OCCUPIED RENT FREE. TO DATE, CLAIMS SO RECEIVED HAVE BEEN REFUSED ON THE GROUNDS THAT SECTION 10 OF THE SELECTIVE TRAINING AND SERVICE ACT OF 1940, AS AMENDED, AUTHORIZES NO ASSUMPTION OF LIABILITY BY THE FEDERAL GOVERNMENT IN ACCEPTING THE USE OF PREMISES, EQUIPMENT OR SERVICE VOLUNTARILY DONATED TO THE SELECTIVE SERVICE SYSTEM, AND CLAIMANTS HAVE BEEN ADVISED TO FILE THEIR CLAIMS WITH YOUR OFFICE.

IN ORDER THAT WE MAY TAKE EFFICIENT ADMINISTRATIVE ACTION ON FUTURE CLAIMS OF THIS NATURE, AND IN ORDER TO DEFINE THE EXTENT OF OUR LEGAL AUTHORITY TO OBLIGATE FEDERAL FUNDS, WE REQUEST YOUR OPINION ON THE FOLLOWING QUESTIONS.

1. DOES THE SELECTIVE SERVICE SYSTEM HAVE LEGAL AUTHORITY TO APPROVE THE EXPENDITURE OF FEDERAL FUNDS FOR THE RESTORATION OF PREMISES TO THE SAME CONDITION AS THAT EXISTING WHEN THEY WERE FIRST OCCUPIED BY FIELD OFFICES OF THE SELECTIVE SERVICE SYSTEM, DAMAGES BY THE ELEMENTS OR BY CIRCUMSTANCES OVER WHICH THE GOVERNMENT HAS NO CONTROL, EXCEPTED, WHERE SUCH PREMISES WERE OBTAINED FOR FEDERAL USE, RENT FREE AND WITHOUT FORMAL AGREEMENT OR LEASE,

(A)WHEN SUCH RESTORATION WOULD INVOLVE ONLY THE NECESSARY REPAIRS INCIDENT TO DAMAGES TO THE PREMISES ARISING FROM THE ACT OR NEGLIGENCE OF THE GOVERNMENT'S AGENTS OR EMPLOYEES, AND

(B) WHEN SUCH RESTORATION WOULD INVOLVE THE NECESSARY REPAIRS INCIDENT TO DAMAGES ARISING FROM REASONABLE AND ORDINARY WEAR AND TEAR OF THE PREMISES, SUCH AS REPAINTING, REDECORATING, ETC. ? THIS ENTIRE QUESTION CONTEMPLATES THAT THE SOLE PURPOSE OF THE RESTORATION IS TO RETURN THE PREMISES TO THE OWNER THEREOF IN THE SAME GENERAL CONDITION AS THAT AT THE TIME OF ENTRY, WITH OCCUPANCY BY THE GOVERNMENT ALREADY TERMINATED OR SURRENDER CONSIDERED WITHIN THE IMMEDIATE FUTURE.

2. IF IT IS YOUR OPINION THAT THE APPROVAL OF EXPENDITURE OF FEDERAL FUNDS FOR SUCH RESTORATION OF PREMISES BY THE SELECTIVE SERVICE SYSTEM IS AUTHORIZED, WOULD IT BE MATERIAL TO YOUR DETERMINATION WHETHER THE RENT- FREE QUARTERS WERE LOCATED IN FEDERAL, STATE, COUNTY, MUNICIPAL OR PRIVATELY OWNED BUILDINGS?

3. IF THE PROPOSED RESTORATION EXPENDITURES ARE AUTHORIZED, WOULD THE OWNER OF THE BUILDING, WHETHER FEDERAL, STATE, COUNTY, MUNICIPAL OR PRIVATE, BE REQUIRED TO REQUEST SUCH RESTORATION ORALLY OR IN WRITING AT ANY PARTICULAR TIME PRIOR TO SURRENDER OF THE PREMISES BY THE GOVERNMENT?

4. AS TO THOSE PREMISES WHICH HAVE ALREADY BEEN RETURNED TO THE OWNER, WOULD THE REQUIREMENT OF SUCH NOTICE, IF NOT MADE PRIOR TO SURRENDER BY THE GOVERNMENT, PRECLUDE RESTORATION AT FEDERAL EXPENSE?

5. IF IT IS YOUR OPINION THAT ANY OF THE PROPOSED RESTORATION WOULD BE AUTHORIZED, WOULD THE EXPENDITURE OF FEDERAL FUNDS FOR SUCH RESTORATION BE GOVERNED BY THE LIMITATIONS OF SECTION 322 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED?

IN VIEW OF CURRENT CONSOLIDATION OF SOME OF THE FIELD OFFICES OF THE SELECTIVE SERVICE SYSTEM, AND THE EXISTING EXPIRATION DATE OF THE SELECTIVE TRAINING AND SERVICE ACT OF 1940, AS AMENDED, WE WILL DOUBTLESS BE CONFRONTED WITH MANY REQUESTS FOR RESTORATION BASED UPON THE SITUATIONS PRESENTED HEREIN. IF YOU FIND IT POSSIBLE TO EXPEDITE YOU OPINION TO US, WE SHALL BE MOST APPRECIATIVE.

SUBSECTION 5 OF SECTION 10 (A) OF THE SELECTIVE TRAINING AND SERVICE ACT OF 1940, 54 STAT. 894, PROVIDES THAT THE PRESIDENT IS AUTHORIZED--

* * * TO OBTAIN BY PURCHASE, LOAN, OR GIFT SUCH EQUIPMENT AND SUPPLIES FOR THE SELECTIVE SERVICE SYSTEM AS HE MAY DEEM NECESSARY TO CARRY OUT THE PROVISIONS OF THIS ACT, WITH OR WITHOUT ADVERTISING OR FORMAL CONTRACT.

THERE IS NOTHING IN THE ACT OR IN THE SELECTIVE SERVICE REGULATIONS PROHIBITING THE RESTORATION OR REPAIR OF PREMISES OBTAINED FOR USE OF THE SELECTIVE SERVICE SYSTEM RENT FREE AND WITHOUT FORMAL LEASE UPON THE GOVERNMENT'S SURRENDER OF SUCH PREMISES TO THE OWNERS.

THE WELL-ESTABLISHED GENERAL RULE IS THAT, IN THE ABSENCE OF A SPECIFIC AGREEMENT TO BE SO LIABLE, A TENANT IS NOT LIABLE FOR DAMAGE TO OR DETERIORATION OF THE LEASED PROPERTY RESULTING FROM ORDINARY WEAR AND TEAR IN THE USE OF THE PROPERTY FOR THE PURPOSE FOR WHICH IT WAS LEASED. C.J. 196; 64 L.R.A. 653, NOTE; 1 COMP. GEN. 134; 16 ID. 92; 18 ID. 8. ALSO, IT HAS BEEN HELD, THAT IN THE ABSENCE OF A SPECIFIC PROVISION TO THE CONTRARY, THERE IS IN EVERY LEASE AN IMPLIED OBLIGATION ON THE TENANT TO SURRENDER THE LEASED PROPERTY AT THE END OF HIS TENANCY IN AS GOOD CONDITION AS AT THE BEGINNING OF THE TENANCY, EXCEPT FOR REASONABLE AND ORDINARY WEAR AND TEAR AND DAMAGES BY THE ELEMENTS OR BY CIRCUMSTANCES OVER WHICH THE TENANT HAD NO CONTROL. MOUNT MANRESA V. UNITED STATES, 70 C.CLS. 144; BURDICK TIRE AND RUBBER COMPANY V. HEYLMANN, 138 N.E. 777, 779; 25 COMP. GEN. 349; SEE ALSO UNITED STATES V. BOSTWICK, 94 U.S. 53; 7 COMP. GEN. 243; 23 ID. 477. SUCH OBLIGATION ARISES OUT OF THE RELATIONSHIP OF LANDLORD AND TENANT AND, THEREFORE, WOULD APPEAR TO EXIST EVEN THOUGH THE OCCUPANCY BE RENT FREE AND WITHOUT FORMAL CONTRACT.

ACCORDINGLY, QUESTION 1 (A) IS ANSWERED IN THE AFFIRMATIVE AND 1 (B) IS ANSWERED IN THE NEGATIVE.

QUESTION 2 IS ANSWERED IN THE NEGATIVE EXCEPT IN THE CASE OF QUARTERS LOCATED IN FEDERAL BUILDINGS. IN CONNECTION WITH GOVERNMENT OWNED PROPERTY UNDER THE ADMINISTRATIVE CONTROL OF ANOTHER DEPARTMENT IT IS A RULE OF LONG STANDING THAT WHERE ONE DEPARTMENT LOANS REAL OR PERSONAL PROPERTY TO ANOTHER DEPARTMENT, IT IS NOT ENTITLED TO CHARGE FOR ITS USE OR DEPRECIATION, OR TO HAVE LOST PROPERTY REPLACED ON DAMAGED PROPERTY REPAIRED BY THE BORROWING DEPARTMENT UPON ITS RETURN TO THE LOANING ESTABLISHMENT. 10 COMP. GEN. 288; 25 ID. 322. HENCE IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY FOR REIMBURSEMENT FOR THE LOSS OR DAMAGE TO SUCH PROPERTY, THE LOSS MUST REMAIN WHERE IT FALLS, THAT IS, UPON THE AGENCY CONTROLLING THE PROPERTY OR EQUIPMENT.

WITH RESPECT TO QUESTION NO. 3, IF THE AGREEMENT UNDER WHICH THE PROPERTY WAS LET TO THE SELECTIVE SERVICE SYSTEM PROVIDED FOR NOTICE THE GOVERNMENT'S OBLIGATION TO MAKE REPAIRS OR TO RESTORE NECESSARILY WOULD BE DEPENDENT UPON THE TERMS OF THE AGREEMENT IN THAT RESPECT AND SUBSTANTIAL COMPLIANCE WITH SUCH REQUIREMENT WOULD CONSTITUTE A CONDITION PRECEDENT TO THE RIGHT OF RECOVERY FOR ANY DAMAGES FOR WHICH THE GOVERNMENT MIGHT OTHERWISE HAVE BEEN LIABLE. 6 COMP. GEN. 533; B 13127, FEBRUARY 17, 1941; B-23723, MARCH 7, 1942; B-60485, OCTOBER 3 AND DECEMBER 18, 1946. BUT, WHERE THE AGREEMENT CONTAINS NO REQUIREMENT FOR NOTICE A CATEGORICAL ANSWER MAY NOT BE MADE SINCE THERE WOULD BE FOR CONSIDERATION THE CIRCUMSTANCES OF EACH PARTICULAR CASE--- INCLUDING THE TIMELINESS OF THE NOTICE--- THOUGH, SPEAKING GENERALLY, NO REASON APPEARS WHY THE PROPERTY MAY NOT BE RESTORED OR REPAIRED OR PAYMENT MADE IN LIEU THEREOF, IF OTHERWISE REQUIRED, WHERE EITHER WRITTEN OR ORAL NOTICE OF DEMAND THEREFOR IS GIVEN WITHIN A REASONABLE TIME AFTER THE OWNER'S RECEIPT OF THE TERMINATION NOTICE.

NEITHER CAN A CATEGORICAL ANSWER BE GIVEN WITH RESPECT TO QUESTION NO. 4. HOWEVER, AS A GENERAL RULE, IF THE NOTICE OF DEMAND WERE GIVEN WITHIN A REASONABLE TIME AFTER THE PREMISES WERE VACATED AND IF THE FAILURE TO GIVE NOTICE IN THE MEANTIME DID NOT AFFECT THE MERITS OF THE CLAIM FOR RESTORATION OR OPERATE TO THE PREJUDICE OF THE UNITED STATES, QUESTION NO. 4 WOULD BE FOR ANSWERING IN THE NEGATIVE.

QUESTION NO. 5 IS ANSWERED IN THE NEGATIVE, IT HAVING BEEN HELD THAT WHERE IT BECOMES NECESSARY UNDER A LEASE FOR THE GOVERNMENT TO RESTORE THE PREMISES, SUCH RESTORATION WOULD NOT BE CONSIDERED ,REPAIRS, IMPROVEMENTS, OR ALTERATIONS" WITHIN THE MEANING OF SECTION 322 OF THE ECONOMY ACT, 47 STAT. 412, AND, THEREFORE, THE PERCENTAGE RESTRICTIONS IN SAID SECTION WOULD NOT APPLY. 20 COMP. GEN. 105.