Matter of: Michael P. Callahan Temporary Quarters Subsistence Expenses File: B-246479 Date: June 9, 1992

Matter of: Michael P. Callahan Temporary Quarters Subsistence Expenses File: B-246479 Date: June 9, 1992

CIVILIAN PERSONNEL Relocation Temporary quarters Actual subsistence expenses Reimbursement Eligibility A transferred employee was authorized 30 days temporary quarters subsistence expenses (TQSE), with two subsequent extensions, but the agency denied his claim for reimbursement for the first 30 days on the basis that he signed a 1-year lease and moved his household goods into his apartment and on-site storage. We conclude that, at the time he moved into the apartment, he only intended to occupy it on a temporary basis. The lease required no deposit and allowed cancellation on 30 days written notice with penalty, over 50 percent of his household goods were not unpacked, he made an intensive effort to locate suitable housing, and he signed a purchase agreement on a house about 5 weeks after his relocation.
Moreover, employee's wife was pregnant and he knew apartment was too small
for larger family. He is, therefore, entitled to reimbursement for TQSE,
and our Claims Group settlement upholding the agency denial is hereby
overruled.

DECISION Mr. Michael P. Callahan appeals our Claims Group settlement
which disallowed his claim for reimbursement of temporary quarters
subsistence expenses (TQSE) incident to a permanent change of station. We
overrule our Claims Group's action for the following reasons.

BACKGROUND

Mr. Callahan, an employee of the Social Security Administration (SSA),
was transferred from his official duty station in Melbourne, Florida, to
Baltimore, Maryland, with a reporting date of September 24, 1990. He was
authorized an initial period of TQSE for 30 days, with two subsequent
extensions.

Mr. Callahan states that he and his wife began looking for permanent
quarters in the Baltimore area approximately 3 months prior to his
transfer. Since he could not find a residence to purchase during that
time, he executed a 1-year lease on an unfurnished two-bedroom apartment
and moved into the apartment with his wife and 3-year old child on
September 23, 1990. Mr. Callahan also moved his household goods into the
apartment or into on-site storage. He signed a purchase agreement on a
residence on October 31, 1990, and went to settlement on December 28,
1990.

Mr. Callahan submitted a travel voucher claiming $1,945.40 for TQSE for
the first 30-day period. The SSA disallowed Mr. Callahan's claim on the
basis of various Comptroller General decisions holding that execution of a
1-year lease and shipment of household goods indicates intent to occupy on
other than a temporary basis, citing Saundra J. Samuels, B-226015, Apr.
25, 1988. Our Claims Group sustained the disallowance on the same basis.

Mr. Callahan contends on appeal that execution of a 1-year lease on the
apartment was a matter of convenience. The lease required no deposit,
allowed for a 30-day notice of cancellation at any time, and the penalty
for early cancellation was the required payment of 2 months additional
rent. Mr. Callahan also points out that the apartment was inadequate for
his family, but it was the only available housing that they could afford
until they were able to find and purchase suitable housing. He says that
they were unable to unpack most of their belongings and essentially lived
out of boxes while they stayed in the apartment. Further, since his wife
was pregnant at that time, he was advised by the apartment management that
he would have to move into larger quarters or cancel the lease when the
baby was born since a family of four would violate the minimum housing
requirement for a two-bedroom apartment. Finally, he continued looking for
permanent quarters, found a good prospect within 3 weeks of relocating,
and signed an agreement to purchase that house within about 5 weeks.

OPINION

The payment to a transferred employee of subsistence expenses while
occupying temporary quarters is authorized by 5 U.S.C. Sec. 5724(a)(3)
(1988). Section 302-5.2(c) of the Federal Travel Regulation, provides that
the term "temporary quarters" refers to lodging obtained from private or
commercial sources for the purpose of occupying it temporarily after
vacating the residence occupied at the old duty station when the transfer
was authorized.

This Office has consistently held that a determination as to what
constitutes temporary quarters is not susceptible of any precise
definition and that the determination must be based upon the facts and
circumstances involved in each case. The threshold determination as to
whether the quarters were initially temporary in nature is based on the
intent of the employee at the time he moves into the dwelling. Carl A.
Zulick, 67 Comp.Gen. 585 (1988); Duane C. Wilson, B-231660.2, May 24,
1991; David M. Shannon, B-230746, Feb. 17, 1989.

The factors to be considered in determining whether quarters are
temporary or permanent are the duration of the lease, the movement of
household goods into the quarters, the type of quarters, expressions of
intent, attempts to secure a permanent dwelling, and the length of time
the employee occupies the quarters. Harrison J. Lane, B-183829, Jan. 2,
1976.

Although we have held that, generally, the execution of a 1-year lease on
a dwelling by an employee at his new duty station is a clear indication
that the employee intends to occupy the rented quarters on other than a
temporary basis, Saundra J. Samuels, B-226015, Apr. 25, 1988, cited by the
agency, we have also held that this Office will examine the remaining five
factors in order to ascertain the intent of the employee at the time he
initially occupied the quarters. Duane C. Wilson, B-231660.2, supra. Thus,
the 1-year lease does not necessarily disqualify Mr. Callahan from
reimbursement of TQSE.

In this case, while Mr. Callahan leased an apartment for 1 year, he did
so because it was the only available housing that he could afford until he
could find a house to buy. Further, the lease contained an early
termination clause which allowed 30-day notice of cancellation and payment
of 2 months rent as a penalty. He was prepared to exercise his right of
early termination and pay the penalty, especially since his wife was
pregnant when he moved in and he was advised that he would have to cancel
his lease or move into larger quarters when his child was born.

Thus, despite the 1-year lease, we are persuaded that Mr. Callahan
intended the apartment to be only a temporary residence until he could
find a suitable house for his family.

As to the movement of household goods into the apartment, Mr. Callahan
states that they left over 50 percent unpacked and essentially lived out
of boxes (slept on a mattress without a box spring) while they stayed in
the apartment. We have held that the movement of household goods into a
dwelling is not by itself, determinative. Charles J. Wilson, B-187622,
June 13, 1977. In Carl J. Zulick, supra, where the employee moved his
household goods into a residence but never unpacked most of them, we held
that fact did not warrant a conclusion of intent to occupy permanently. We
believe that conclusion applies equally well to Mr. Callahan.

Further, the intensity of Mr. Callahan's efforts and the immediacy with
which he began his attempts to locate suitable housing lend additional
support to a determination that he intended to occupy the apartment only
temporarily. He actually started searching for a house 3 months prior to
his permanent duty assignment, and moved into the small apartment only
because he was unable to find a suitable house before relocating to
Baltimore. He found a suitable house within 3 weeks of his arrival and
contracted to purchase it about 5 weeks after arrival. These facts
demonstrate his intent to occupy the apartment only temporarily until he
could find a house to buy. See Carl A. Zulick, 67 Comp.Gen. 585, supra;
Duane C. Wilson, B-231660.2, supra; Robert D. Hawks, B-205057, Feb. 24,
1982.

Accordingly, we overrule our Claims Group settlement and conclude that
the apartment occupied by Mr. Callahan upon arrival in the Baltimore area
constituted "temporary quarters" for which he is entitled to reimbursement
of subsistence expenses.

To: Director, Claims Group GGD

From: General Counsel James F. Hinchman

Subject: Michael P. Callahan Temporary Quarters Subsistence Expense -
B-246479-O.M.

We are returning claim file Z-2867294, in the case of Michael P.
Callahan.

By decision B-246479, dated today, copy attached, we have overruled your
disallowance of his claim for the reasons stated.