B-178039, APR 9, 1973

B-178039, APR 9, 1973

DECISION CERTIFYING PAYMENT OF VOUCHER FOR FEES INCURRED AS REAL ESTATE EXPENSES, INCIDENT TO A PERMANENT CHANGE OF STATION. SELLER'S SERVICE CHARGE, FEE IN ISSUE, WAS FOR SERVICE OF PAYING OFF MORTGAGE, OBTAINING AND PREPARING, AND RECORDING THE NECESSARY RELEASE. THESE ARE LEGAL AND RELATED COSTS.

TO MR. CARL E. FANUCCI:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 6, 1973, REQUESTING A DECISION AS TO WHETHER CERTAIN REAL ESTATE EXPENSES INCURRED BY MR. JOHN C. BLANTON, INCIDENT TO A PERMANENT CHANGE OF STATION, MAY BE CERTIFIED FOR PAYMENT.

PURSUANT TO TRAVEL ORDERS DATED NOVEMBER 11, 1971, MR. BLANTON, AN EMPLOYEE OF THE BUREAU OF NARCOTICS AND DANGEROUS DRUGS (BNDD), WAS TRANSFERRED FROM WASHINGTON, D.C., TO DALLAS, TEXAS. IN CONNECTION WITH THIS TRANSFER, HE SOLD HIS RESIDENCE AT HIS OLD OFFICIAL DUTY STATION AND INCURRED THE FOLLOWING RELEASE FEES WHEN PAYING OFF THE MORTGAGE ON THE PROPERTY:

ATTORNEY'S RELEASE FEE $15.00

RECORDING RELEASE 2.00

SELLER'S SERVICE CHARGE 50.00

$67.00

THESE FEES WERE DISALLOWED BY BNDD CITING SECTION 4 OF OFFICE OF MANAGEMENT AND BUDGET CIRCULAR NO. A-56 AND OUR DECISION B-169477, JUNE 2, 1970. IN THAT CASE THE SELLER PAID $202.73 TO THE LENDING INSTITUTION TO OBTAIN A RELEASE FROM PERSONAL LIABILITY ON AN EXISTING MORTGAGE WHICH WAS ASSUMED BY THE PURCHASER. WE DISALLOWED PAYMENT OF THE FEE SINCE THE SALE WAS NOT DEPENDENT ON THE SELLER'S OBTAINING THE RELEASE, STATING THAT ALLOWANCES UNDER THE ABOVE CIRCULAR ARE LIMITED TO THOSE EXPENSES REQUIRED BY THE EMPLOYEE INCIDENT TO THE AUTHORIZED REAL ESTATE TRANSACTIONS AS SET FORTH IN SECTION 4.1.

THE PRESENT RECORD REVEALS, HOWEVER, THAT THE $50 FEE CHARGED MR. BLANTON IN THIS CASE WAS NOT FOR THE PURPOSE OF OBTAINING A RELEASE FROM PERSONAL LIABILITY ON HIS EXISTING MORTGAGE, BUT RATHER FOR THE SERVICE OF PAYING OFF THIS MORTGAGE AND FOR OBTAINING, PREPARING, AND RECORDING THE NECESSARY RELEASE. THE $15 ITEM WAS AN ATTORNEY'S CHARGE ASSESSED BY THE LOAN ASSOCIATION. WE UNDERSTAND THE PURCHASER SECURED A NEW MORTGAGE AND LOAN INSTEAD OF ASSUMING MR. BLANTON'S MORTGAGE. THE EXISTING MORTGAGE WAS IN TURN PAID OFF BY MR. BLANTON WITH THE PROCEEDS OF THE LOAN (I.E., THE PURCHASE PRICE). IN THIS REGARD, FEES CHARGED A SELLER IN ORDER TO CLOSE HIS MORTGAGE AND TO RECORD THE RELEASE THEREOF MAY BE REIMBURSED AS LEGAL AND RELATED COSTS UNDER SECTION 4.2C OF THE CIRCULAR AS "COSTS OF PREPARING CONVEYANCES, OTHER INSTRUMENTS," AND RELATED "RECORDING FEES." SEE B-174011, NOVEMBER 15, 1971, COPY ENCLOSED. THESE COSTS ARE TO BE DISTINGUISHED FROM FEES ASSESSED FOR THE PURPOSE OF RELEASING A SELLER FROM PERSONAL LIABILITY ON A MORTGAGE ASSUMED BY THE PURCHASER. SUCH FEES ARE NOT REIMBURSABLE, BEING MERELY A MATTER OF PERSONAL PREFERENCE AND NOT NECESSARY TO CONSUMMATION OF THE SALE. SEE B-169477, SUPRA.

ACCORDINGLY, THE VOUCHER IS RETURNED HEREWITH AND MAY BE CERTIFIED FOR PAYMENT.