B-198767.OM, OCT 14, 1980

B-198767.OM: Oct 14, 1980

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FGMSD - CLAIMS GROUP (ROOM 5858): RETURNED HEREWITH IS FILE Z-2814834. THE MONTHLY RENT FOR THE HOUSE WAS $575. WE NOTE THAT YOU HAVE INFORMED US THAT THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT HAS DETERMINED THAT IT IS CUSTOMARY TO USE A BROKER TO LOCATE RENTAL HOUSING IN THE NEW YORK AREA. EL-SHERIF CLAIMS HE IS ENTITLED TO REIMBURSEMENT OF THE BROKER'S FEE SINCE THE TOTAL COST OF RENTING THE HOUSE WAS LESS THAN WHAT IT WOULD HAVE COST TO RENT TWO HOTEL ROOMS NECESSARY TO ACCOMMODATE HIS FAMILY AT $45 TO $50 PER NIGHT. (COPY ATTACHED) WE HELD THAT EMPLOYEES OF HUD'S CHICAGO REGIONAL ACCOUNTING OFFICE WHO WERE ASSIGNED TO EXTENDED TEMPORARY DUTY AT THE NEW YORK REGIONAL OFFICE COULD BE REIMBURSED FOR BROKERS' FEES CHARGED FOR LOCATING RENTAL HOUSING.

B-198767.OM, OCT 14, 1980

PRECIS-UNAVAILABLE

ASSOCIATE DIRECTOR, FGMSD - CLAIMS GROUP (ROOM 5858):

RETURNED HEREWITH IS FILE Z-2814834, WHICH YOU FORWARDED TO US WITH A REQUEST FOR OUR ADVICE CONCERNING DR. EL-SHERIF'S ENTITLEMENT TO REIMBURSEMENT OF A BROKER'S FEE HE INCURRED IN ORDER TO RENT A HOUSE FOR TEMPORARY QUARTERS AT HIS NEW PERMANENT DUTY STATION.

TRANSFERRED FROM MIAMI TO NEW YORK BY THE VETERAN'S ADMINISTRATION, DR. EL-SHERIF DECIDED TO RENT A HOUSE FOR HIMSELF AND THE SEVEN MEMBERS OF HIS FAMILY RATHER THAN TO RENT HOTEL ROOMS. THE RECORD SHOWS, HOWEVER, THAT DR. EL-SHERIF AND HIS FAMILY OCCUPIED COMMERCIAL QUARTERS FOR 10 DAYS UNTIL THEIR FURNITURE ARRIVED FROM MIAMI. FOR THE REMAINING 20 DAYS OF DR. EL-SHERIF'S ENTITLEMENT TO TEMPORARY QUARTERS SUBSISTENCE EXPENSES, HE AND HIS FAMILY RESIDED IN A 3 BEDROOM HOUSE. THE MONTHLY RENT FOR THE HOUSE WAS $575, AND THE BROKER CHARGED THAT AMOUNT AS HIS FEE SO THE TOTAL RENTAL COST AMOUNTED TO $1150. WE NOTE THAT YOU HAVE INFORMED US THAT THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT HAS DETERMINED THAT IT IS CUSTOMARY TO USE A BROKER TO LOCATE RENTAL HOUSING IN THE NEW YORK AREA. DR. EL-SHERIF CLAIMS HE IS ENTITLED TO REIMBURSEMENT OF THE BROKER'S FEE SINCE THE TOTAL COST OF RENTING THE HOUSE WAS LESS THAN WHAT IT WOULD HAVE COST TO RENT TWO HOTEL ROOMS NECESSARY TO ACCOMMODATE HIS FAMILY AT $45 TO $50 PER NIGHT.

IN A RECENT CASE, B-198981, JULY 22, 1980, (COPY ATTACHED) WE HELD THAT EMPLOYEES OF HUD'S CHICAGO REGIONAL ACCOUNTING OFFICE WHO WERE ASSIGNED TO EXTENDED TEMPORARY DUTY AT THE NEW YORK REGIONAL OFFICE COULD BE REIMBURSED FOR BROKERS' FEES CHARGED FOR LOCATING RENTAL HOUSING. ALLOWED REIMBURSEMENT UNDER PARAGRAPH 1-9.1D OF THE FEDERAL TRAVEL REGULATIONS (FTR) WHICH PROVIDES THAT MISCELLANEOUS EXPENDITURES NECESSARILY INCURRED BY A TRAVELER IN CONNECTION WITH THE TRANSACTION OF OFFICIAL BUSINESS SHALL BE ALLOWED WHEN APPROVED. WE CONDITIONED REIMBURSEMENT ON A SHOWING THAT IT WAS NECESSARY TO INCUR THE CLAIMED EXPENSES TO OBTAIN LOWER COST LODGINGS AND THAT THE SUM OF THE BROKER'S FEES AND THE RENTAL COST WAS LESS THAN THE COST OF HOTEL ROOMS FOR THE SAME PERIOD.

IT APPEARS IN THE PRESENT CASE THAT THE SERVICES OF A BROKER WERE NECESSARY TO OBTAIN THE RENTAL QUARTERS. THEREFORE, IF YOU ARE SATISFIED THAT THE SUM OF THE BROKERS' FEE AND THE RENTAL COST WAS LESS THAN WHAT HOTEL ROOMS WOULD HAVE COST FOR THE SAME PERIOD, WE SEE NOTHING TO PREVENT REIMBURSEMENT OF THE FEE UNDER FTR PARAGRAPH 2 5.4A.

SUBJECT: CLAIM OF NABIL EL-SHERIF, Z-2814834

WE ARE FORWARDING MR. EL-SHERIF'S CLAIM. THE CLAIMANT WAS TRANSFERRED FROM MIAMI TO NEW YORK BY THE VETERAN'S ADMINISTRATION. UPON ARRIVAL IN NEW YORK, HE HAD TO SECURE TEMPORARY HOUSING FOR THE SEVEN MEMBERS OF HIS FAMILY. ONE OPTION WAS TO RENT TWO ROOMS IN A HOTEL, AT THE RATE OF $45- 50 PER DAY FOR EACH ROOM. THIS WOULD HAVE TOTALLED APPROXIMATELY $3,000 FOR THE ALLOWED 30 DAYS TQSE.

IN AN EFFORT TO REDUCE EXPENSES, THE CLAIMANT OPTED TO TEMPORARILY RENT A 3 BEDROOM HOUSE. HOWEVER, HE FOUND IT NECESSARY TO SECURE THE SERVICES OF A BROKER, WHO CHARGED A FEE EQUAL TO ONE MONTH'S RENT. THE HOUSE WHICH THE CLAIMANT RENTED FOR 30 DAYS COST $575, PLUS A BROKER'S FEE OF $575, WHICH TOTALLED $1150.00.

COMPTROLLER GENERAL DECISION B-177395, MARCH 27, 1973 ALLOWED THE REIMBURSEMENT OF BROKER'S FEES IN NEW YORK TO LOCATE PERMANENT RENTAL HOUSING. HOWEVER, WE ARE UNAWARE OF ANY B-DECISIONS WHICH ADDRESS THE USE OF A BROKER FOR TEMPORARY RENTAL HOUSING. THERE ARE SOME DECISIONS WHICH DENY THE REIMBURSEMENT OF NONREFUNDABLE "DEPOSITS" INCURRED IN RENTING QUARTERS AS PART OF TQSE. THE NATURE OF THIS EXPENSE, HOWEVER, APPEARS TO DIFFER FROM THAT OF A DEPOSIT.

EVEN THOUGH THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT HAS DETERMINED THAT THE USE OF A BROKER IN LOCATING RENTAL HOUSING IS CUSTOMARY IN THE NEW YORK AREA, THERE APPEARS TO BE NO SPECIFIC AUTHORITY TO REIMBURSE AN EMPLOYEE FOR THESE EXPENSES WHEN LOCATING TEMPORARY RENTAL HOUSING.

WE REQUEST YOUR ADVICE CONCERNING MR. EL-SHERIF'S ENTITLEMENT TO REIMBURSEMENT OF THESE BROKER'S FEES. THE ADJUDICATOR HANDLING THIS MATTER IS ERIC FELDMAN, WHOSE EXTENSION IS 53218.