B-223112, NOV 25, 1986

B-223112: Nov 25, 1986

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

CIVILIAN PERSONNEL - RELOCATION - RESIDENCE TRANSACTION EXPENSES - ADDITIONAL EXPENSES - REIMBURSEMENT - ELIGIBILITY DIGEST: A TRANSFERRED EMPLOYEE SOLD HIS RESIDENCE AT HIS OLD DUTY STATION AND WAS REIMBURSED FOR HIS AUTHORIZED EXPENSES. THE CLAIM IS DENIED. WE HAVE HELD THAT PARA. 2-6.1 OF THE FEDERAL TRAVEL REGULATIONS PERMITS REIMBURSEMENT FOR ONLY ONE SET OF AUTHORIZED EXPENSES RELATING TO ONE SALE OF A RESIDENCE AND ONE PURCHASE OF A RESIDENCE. SINCE THE EXPENSES OF A SALE WERE PAID. MAY - REAL ESTATE TRANSACTION EXPENSES - RESIDENCE RESALE: THIS DECISION IS IN RESPONSE TO A REQUEST FROM SHELDON M. WE CONCLUDE THAT HE IS NOT ENTITLED TO ADDITIONAL REIMBURSEMENT FOR THE FOLLOWING REASONS.

B-223112, NOV 25, 1986

CIVILIAN PERSONNEL - RELOCATION - RESIDENCE TRANSACTION EXPENSES - ADDITIONAL EXPENSES - REIMBURSEMENT - ELIGIBILITY DIGEST: A TRANSFERRED EMPLOYEE SOLD HIS RESIDENCE AT HIS OLD DUTY STATION AND WAS REIMBURSED FOR HIS AUTHORIZED EXPENSES. DUE TO MARKET CONDITIONS, THE EMPLOYEE HAD TO TAKE BACK A MORTGAGE TO FACILITATE THE SALE. NEARLY A YEAR LATER WHEN THE NEW OWNER DEFAULTED ON PAYMENTS, THE EMPLOYEE FORECLOSED, REGAINED LEGAL TITLE AND THEN RESOLD THE PROPERTY. HE NOW CLAIMS ADDITIONAL EXPENSES FOR THE RESALE. THE CLAIM IS DENIED. WE HAVE HELD THAT PARA. 2-6.1 OF THE FEDERAL TRAVEL REGULATIONS PERMITS REIMBURSEMENT FOR ONLY ONE SET OF AUTHORIZED EXPENSES RELATING TO ONE SALE OF A RESIDENCE AND ONE PURCHASE OF A RESIDENCE. SINCE THE EXPENSES OF A SALE WERE PAID, THE RESALE EXPENSES OF A RESALE MAY NOT BE PAID. DOUGLAS D. WALLDORFF, 57 COMP.GEN. 669 (1978).

MICHAEL D. MAY - REAL ESTATE TRANSACTION EXPENSES - RESIDENCE RESALE:

THIS DECISION IS IN RESPONSE TO A REQUEST FROM SHELDON M. BRANDT, REGIONAL FINANCE OFFICER, SOUTHWEST REGION, BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR. IT CONCERNS THE ENTITLEMENT OF AN EMPLOYEE TO BE REIMBURSED ADDITIONAL REAL ESTATE EXPENSES INCIDENT TO A PERMANENT CHANGE OF STATION IN JANUARY 1984. WE CONCLUDE THAT HE IS NOT ENTITLED TO ADDITIONAL REIMBURSEMENT FOR THE FOLLOWING REASONS.

BACKGROUND

MR. MICHAEL D. MAY, AN EMPLOYEE OF THE BUREAU OF RECLAMATION, WAS TRANSFERRED IN THE INTEREST OF THE GOVERNMENT FROM BAKERSFIELD, CALIFORNIA, TO AMARILLO, TEXAS, AND REPORTED FOR WORK AT THE NEW DUTY STATION ON JANUARY 11, 1984. INCIDENT TO THAT TRANSFER, HE SOLD HIS RESIDENCE IN BAKERSFIELD ON AUGUST 29, 1984, AND WAS REIMBURSED $5,355.15, REPRESENTING THE EXPENSES HE INCURRED AS A RESULT OF THAT SALE.

MR. MAY IS PRESENTLY CLAIMING AN ADDITIONAL $295.90, FOR A SECOND SALE OF THE PROPERTY ON JANUARY 29, 1986.

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

RULING

THE PROVISIONS OF LAW GOVERNING REIMBURSEMENT FOR REAL ESTATE EXPENSES INCIDENT TO A TRANSFER OF DUTY STATION ARE CONTAINED IN 5 U.S.C. SEC. 5724A (1982) AND REGULATIONS ISSUED PURSUANT THERETO. THOSE REGULATIONS ARE CONTAINED IN PART 6 OF CHAPTER 2, FEDERAL TRAVEL REGULATIONS, FPMR 101 -8 (SEPTEMBER 1981), INCORP. BY REF., 41 C.F.R. SEC. 101-7.003 (1983) (FTR), AS AMENDED, IN PART, BY GSA BULLETIN FPMR A-40, SUPP. 4 (EFFECTIVE OCTOBER 1982).

PARAGRAPH 2-6.1 OF THOSE REGULATIONS PROVIDES IN PART:

"2-6.1 CONDITIONS AND REQUIREMENTS UNDER WHICH ALLOWANCES ARE PAYABLE. TO THE EXTENT ALLOWABLE UNDER THIS PROVISION, THE GOVERNMENT SHALL REIMBURSE AN EMPLOYEE FOR EXPENSES REQUIRED TO BE PAID BY HIM/HER IN CONNECTION WITH THE SALE OF ONE RESIDENCE AT HIS/HER OLD OFFICIAL STATION

WE HAVE HELD THAT THE INTENT OF THE REGULATIONS IS TO PERMIT REIMBURSEMENT TO THE EMPLOYEE FOR ONLY ONE SET OF AUTHORIZED EXPENSES RELATING TO ONE SALE OF A RESIDENCE AND ONE PURCHASE OF A RESIDENCE. DOUGLAS D. WALLDORFF, 57 COMP.GEN. 669 (1978). ACCORDINGLY, WE HELD IN THAT CASE THAT LEGAL FEES RELATING TO AN UNCONSUMMATED CONTRACT OF SALE ARE NOT REIMBURSABLE.

IN THE PRESENT CASE, THE EXPENSES OF SALE WERE ALREADY REIMBURSED IN CONNECTION WITH THE AUGUST 29, 1984, CLOSING. WE BELIEVE THE PRINCIPLE ENUNCIATED IN WALLDORFF IS EQUALLY APPLICABLE TO THE RESALE OF A RESIDENCE FOR WHICH SALES EXPENSES HAVE BEEN REIMBURSED. THE EMPLOYEE IS STILL ENTITLED TO ONLY "ONE SET OF AUTHORIZED EXPENSES RELATING TO ONE SALE ***." WALLDORFF, SUPRA AT 673.

THEREFORE, MR. MAY'S CLAIM FOR REIMBURSEMENT OF THE ADDITIONAL EXPENSES HE INCURRED IN THE RESALE OF HIS FORMER RESIDENCE IS DENIED.