Reimbursement of Legal Fees Incident to Sale of Residence

B-177323, JAN 2, 1973

CIVILIAN PERSONNEL - LEGAL FEES - PURCHASE OF RESIDENCE DECISION ALLOWING CERTIFICATION FOR PAYMENT OF A VOUCHER IN FAVOR OF DONALD L. BRODSKY, AN EMPLOYEE OF THE FEDERAL MEDIATION AND CONCILIATION SERVICE, REPRESENTING LEGAL FEES ASSOCIATED WITH THE PURCHASE OF A NEW RESIDENCE INCIDENT TO A PERMANENT CHANGE OF STATION. LEGAL FEES FOR THE PREPARATION OF ABSTRACT OF TITLE, THE RENDERING OF A TITLE OPINION, PREPARATION OF DEED AND MORTGAGE PAPERS, CONDUCTING SETTLEMENT, AND A TITLE EXAMINATION WHERE IT IS CUSTOMARILY PAID BY THE PURCHASER IN THE AREA INVOLVED ARE ALL REIMBURSABLE UNDER OMB CIRCULAR NO. A-56, SECTION 4.2C.

TO MISS ROSE M. SPERLING:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 25, 1972, WITH ENCLOSURES, WHICH REQUESTS OUR DECISION AS TO WHETHER THE ENCLOSED RECLAIM VOUCHER IN THE AMOUNT OF $425, IN FAVOR OF                                                           , AN EMPLOYEE OF THE FEDERAL MEDIATION AND CONCILIATION SERVICE, MAY BE CERTIFIED FOR PAYMENT UNDER THE CIRCUMSTANCES HEREINAFTER DESCRIBED.

THE RECORD INDICATES THAT UNDER TRAVEL AUTHORIZATION NO. 0-71-35, DATED JULY 29, 1970,                                    EFFECTED A CHANGE OF HIS OFFICIAL DUTY STATION TO BALTIMORE, MARYLAND. IN CONNECTION WITH SUCH TRANSFER HE PURCHASED A RESIDENCE AT THE NEW OFFICIAL DUTY STATION AND SUBMITTED A VOUCHER FOR THE REIMBURSEMENT OF COSTS INCURRED INCIDENT THERETO. THE AMOUNT OF $425, REPRESENTING COSTS INCURRED BY                                    FOR LEGAL FEES ASSOCIATED WITH THE PURCHASE OF HIS RESIDENCE AT THE NEW DUTY STATION, WAS SUSPENDED SINCE THE LEGAL SERVICES WERE NOT ITEMIZED.                                    HAS NOW SUBMITTED A RECLAIM VOUCHER FOR THE $425 LEGAL SERVICES. IN SUPPORT THEREOF HE HAS ENCLOSED STATEMENTS FROM THE LENDER'S ATTORNEY WHO PERFORMED THE SERVICES, STATING THAT THE FEE COVERED A TITLE EXAMINATION, PREPARATION OF ABSTRACT OF TITLE, THE RENDERING OF A TITLE OPINION, CONDUCTING THE SETTLEMENT, AND PREPARATION OF THE DEED AND MORTGAGE PAPERS.

SECTION 4.2C OF THE CONTROLLING REGULATIONS, OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56, REVISED JUNE 26, 1969, STATES AS FOLLOWS:

"C. LEGAL AND RELATED COSTS. TO THE EXTENT SUCH COSTS HAVE NOT BEEN INCLUDED IN BROKERS' OR SIMILAR SERVICES FOR WHICH REIMBURSEMENT IS CLAIMED UNDER OTHER CATEGORIES, THE FOLLOWING EXPENSES ARE REIMBURSABLE WITH RESPECT TO THE SALE AND PURCHASE OF RESIDENCES IF THEY ARE CUSTOMARILY PAID BY THE SELLER OF A RESIDENCE AT THE OLD OFFICIAL STATION OR IF CUSTOMARILY PAID BY THE PURCHASER OF A RESIDENCE AT THE NEW OFFICIAL STATION, TO THE EXTENT THEY DO NOT EXCEED AMOUNTS CUSTOMARILY CHARGED IN THE LOCALITY OF THE RESIDENCE; COSTS OF (1) SEARCHING TITLE, PREPARING ABSTRACT, AND LEGAL FEES FOR A TITLE OPINION, OR (2) WHERE CUSTOMARILY FURNISHED BY THE SELLER, THE COST OF A TITLE INSURANCE POLICY; COSTS OF PREPARING CONVEYANCES, OTHER INSTRUMENTS, AND CONTRACTS; RELATED NOTARY FEES AND RECORDING FEES; COSTS OF MAKING SURVEYS, PREPARING DRAWINGS OR PLATS WHEN REQUIRED FOR LEGAL OR FINANCING PURPOSES; AND SIMILAR EXPENSES. COSTS OF LITIGATION ARE NOT REIMBURSABLE."

ALL OF THE SERVICES HERE INVOLVED, WITH THE EXCEPTION OF THOSE ITEMS PERTAINING TO THE TITLE EXAMINATION AND CONDUCTING THE SETTLEMENT, ARE EXPRESSLY STATED TO BE REIMBURSABLE SERVICES UNDER SECTION 4.2C, SUPRA. AS TO THE ITEM RELATING TO TITLE EXAMINATION, WE HELD IN B-171323, FEBRUARY 5, 1971, COPY HEREWITH, THAT THE EXPENSES INCURRED FOR SUCH A SERVICE ARE REIMBURSABLE WHEN CUSTOMARILY PAID BY THE PURCHASER IN THE AREA INVOLVED. INASMUCH AS THAT IS THE CASE IN THE BALTIMORE, MARYLAND AREA, THE COST OF TITLE EXAMINATION IS REIMBURSABLE. REGARDING THE CONDUCTING OF THE SETTLEMENT BY THE ATTORNEY, WE ARE OF THE VIEW THAT, INASMUCH AS THIS IS NOT A PERSONAL SERVICE TO THE EMPLOYEE OF AN ADVISORY OR REPRESENTATIONAL NATURE, THAT A FEE FOR SUCH LEGAL SERVICE IS ALSO REIMBURSABLE.

WE HAVE PREVIOUSLY INDICATED THE NECESSITY TO STATE SEPARATELY THE COSTS INCURRED BY AN EMPLOYEE FOR EACH LEGAL SERVICE OBTAINED INCIDENT TO THE PURCHASE OR SALE OF A RES    ENCE. HOWEVER, WE DO NOT BELIEVE THAT ADHERENCE TO THE REQUIREMENT OF COST ITEMIZATION IS REQUIRED IN THOSE SITUATIONS WHERE ALL THE LEGAL SERVICES RECEIVED BY THE EMPLOYEE ARE REIMBURSABLE. IN SUCH CASES IT IS OUR VIEW THAT PAYMENT OF THE SUM OF THE COSTS FOR ALL REIMBURSABLE SERVICES (THE FLAT FEE) HAS THE SAME PROPRIETY AS THE PAYMENT OF EACH FEE ON AN INDIVIDUAL BASIS.

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