B-228733, Nov 22, 1988

B-228733: Nov 22, 1988

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MILITARY PERSONNEL - Travel - Overseas travel - Overseas allowances - Housing allowances - Amount determination DIGEST: A member who rents a residence shall not be considered a sharer for purposes of reducing his housing allowance entitlement even though the owner of the residence is his fiancee and both live in the residence. The member is not a sharer under the applicable regulations because his fiancee is not entitled to housing allowances and she does not contribute money for his rent or payments. Jr. - Overseas Housing Allowance: The question presented in this case is whether a service member. Is a sharer for purposes of entitlement to rent-plus Overseas Housing Allowances (OHA). /1/ For the reasons indicated below.

B-228733, Nov 22, 1988

MILITARY PERSONNEL - Travel - Overseas travel - Overseas allowances - Housing allowances - Amount determination DIGEST: A member who rents a residence shall not be considered a sharer for purposes of reducing his housing allowance entitlement even though the owner of the residence is his fiancee and both live in the residence. The member is not a sharer under the applicable regulations because his fiancee is not entitled to housing allowances and she does not contribute money for his rent or payments.

Lieutenant Colonel Joseph R. Horton, Jr. - Overseas Housing Allowance:

The question presented in this case is whether a service member, who resides with his fiancee and who has a rental agreement with her, is a sharer for purposes of entitlement to rent-plus Overseas Housing Allowances (OHA). /1/ For the reasons indicated below, we hold that the member was not a sharer for purposes of determining OHA entitlement and that the member was entitled to his OHA at a non-sharer's rate.

BACKGROUND

Lieutenant Colonel Joseph R. Horton, Jr., United States Marine Corps, moved into his fiancee's residence in Honolulu, Hawaii, on August 15, 1984. His fiancee occupied this residence, she was and remains the sole owner of the residence, and she pays a monthly mortgage of approximately $2,000. At the time he moved in, Colonel Horton entered into a lease with his fiancee and agreed to pay her a monthly rent of $1,000. He then asked disbursing officials whether this arrangement was acceptable for purposes of the rent-plus housing allowance. On September 7, 1984, Colonel Horton was advised by disbursing officials that as long as he was covered by a valid lease, he could continue to receive the housing allowance.

In response to a change in the regulations in 1986, disbursing officials asked the member to fill out new OHA forms and update his lease agreement. He then entered into a new lease agreement with his fiancee, and he continued to pay a rent of $1,000 monthly plus utilities. Disbursing officials used his information as the basis for listing the member as a non-sharer on the revised April 1986 OHA certificate. The member continued to receive rent-plus housing allowance payments at a non- sharer's rate.

The member and his fiancee were married on January 3, 1987, and he subsequently updated information necessary for his continued entitlement to OHA. After reviewing this information, a disbursing officer at Camp Smith reported that she suspected the member of fraudulently receiving excess OHA entitlements by having failed to identify himself as a sharer on the certificate used to compute OHA entitlements. The Naval Investigative Service (NIS) then conducted an investigation as to whether the member received approximately $4,700 in excess rent-plus entitlements for the period April 1, 1986, to January 3, 1987. The member insisted he did not falsify information on his OHA certificate and believes that a sharer would be a person who contributes money toward his rental payment of $1,000 per month. Since his fiancee did not contribute to his rental payment, the member contends that he cannot be considered a sharer for purposes of OHA entitlement.

OPINION

A member of the armed services who is stationed outside the continental United States or in Hawaii or Alaska may be authorized housing allowances under the provisions of 37 U.S.C. Sec. 405 (1982) and chapter 4, part G, of volume 1 of the Joint Travel Regulations (JTR), which have been superseded by the Joint Federal Travel Regulations (JFTR). A "rent-plus" housing allowance which is based on the actual costs incurred for living quarters will be prorated when members share a residence. 64 Comp.Gen. 501, 502 (1985).

Prior to April 1, 1986, paragraph M4300.3 of 1 JTR defined sharers as other service members or federal civilian employees entitled to housing allowances. Generally speaking, the more sharers at a particular residence, the lower each individual sharer's housing allowance. 1 JFTR para. U9100-D.2 (formerly 1 JTR para. M4301-3.b.). Effective April 1, 1986, the definition of sharers was expanded. Paragraph U-9000-C of 1 JFTR (formerly 1 JTR para. M4300.3) defines a sharer as a member entitled to an Overseas Housing Allowance and residing with one or more:

"1. members entitled to an OHA or variable housing allowance; and/or

2. federal civilian employees, including dependents, entitled to a living quarters allowance; and/or

3. individuals, excluding dependents of the member, who contribute money toward the payment of rent, mortgage and/or utilities."

Based on the information in the record before us, the member's fiancee does not appear to have been either a service member or a federal civilian employee entitled to a housing allowance. Thus, it must be determined whether the member's fiancee is an individual who contributed money toward the payment of the member's rent, mortgage and/or utilities.

Our interpretation of 1 JFTR para. U-9000-C is that a member would be a sharer if another individual contributes money toward the payment of the member's rent, mortgage and/or utilities. This interpretation is supported by 1 JFTR para. U9100-D.2. (formerly 1 JTR para. 4301 3.b.). In that provision, the housing allowance is determined by "the amount paid per month by a member ... "in rental payments. Since it was the member's fiancee who actually owned the residence, it cannot be said that the member was making mortgage payments.

Colonel Horton's situation in the present case must be distinguished from the situation in 64 Comp.Gen. 501, supra. In that decision we held that when two members of the uniformed services received housing allowances and shared a residence, their rent-plus housing allowance must be paid at a sharer's rate. This is regardless of whether one of the members claimed to be a non-sharer-- a guest paying none of the expenses. That decision is different from the present case in that here only one of the occupants of the residence is a member of the military and entitled to a housing allowance.

The next question is whether a valid rental agreement existed between the member and his fiancee. Although the relationship between the member and his fiancee was not the usual landlord/tenant relationship, their lease agreement appears to be valid. Their rental agreement was on a standard lease form, and both the member and his fiancee had the right to terminate the lease upon a month's notice. The record indicates that the member diligently paid his rent from his own funds and these payments were deposited into his fiancee's account from which he could not draw funds. It appears that the member's $1,000 monthly rental payment represented one -half of the fair market rent for similar properties in this locality.

If the lease agreement can be considered valid, the next question is whether the member received assistance for his rent and/or utility payments from his fiancee. According to the member

"I rent directly from her and pay her the full $1,000 per month. She does not share in any way shape or form in the $1,000 per month ... She does not return any portion of the $1,000 rent that I agreed to pay each and every month. In no way does she reimburse me, give me cash, anyway concerning that $1000 dollars. She would not offer and I would not ask." Transcript of NIS interrogation of Colonel Horton, March 30, 1987, pages 2 and 8.

It appears then that no other individual, including his fiancee, contributed to the member's monthly rental payments. During the period in question, the member also paid for all the utilities except for the telephone.

Thus, since the member did not receive money from his fiancee for either rent and utility payments, he cannot be considered a sharer for purposes of OHA entitlement. The amount of the monthly rent paid by the member to his fiancee in accordance with their lease agreement was correctly used in computing the member's entitlement to OHA under 1 JFTR para. U9100-D.2. (formerly 1 JTR para. 4301 3.b.).

/1/ The question was forwarded to us for an advance decision by the Per Diem, Travel and Transportation Allowance Committee, Control No. 87 12.