B-230402, Mar 23, 1988

B-230402: Mar 23, 1988

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CIVILIAN PERSONNEL - Relocation - Residence Transaction Expenses - Inspection Fees - Reimbursement DIGEST: An employee is not entitled to reimbursement of a home inspection fee he paid incident to purchase of a residence at his new duty station. Is not entitled to reimbursement of a home inspection fee. /1/ Mr. He purchased a home in the vicinity of Denver with the purchase contract giving him the right to have the home inspected for defects and radon levels. The Bureau of Reclamation determined that it was not the customary practice to pay inspection fees in connection with home sales by checking with the local office of the Department of Housing and Urban Development and Mr. Since the inspection was not required to complete the sale.

B-230402, Mar 23, 1988

CIVILIAN PERSONNEL - Relocation - Residence Transaction Expenses - Inspection Fees - Reimbursement DIGEST: An employee is not entitled to reimbursement of a home inspection fee he paid incident to purchase of a residence at his new duty station, since he obtained the inspection to protect his own property interest, rather than to complete the sale by satisfying a customary obligation of a purchaser.

Ronald M. Pearson - Residence Purchase - Inspection Fee:

In this case, we decide that Mr. Ronald M. Pearson, an employee of the Bureau of Reclamation, Department of the Interior, is not entitled to reimbursement of a home inspection fee. /1/

Mr. Pearson transferred from Rock Island, Illinois, to Denver, ado, in January 1987. He purchased a home in the vicinity of Denver with the purchase contract giving him the right to have the home inspected for defects and radon levels, as well as the right to avoid the contract if the seller did not remedy problems revealed by the inspections. The Bureau of Reclamation determined that it was not the customary practice to pay inspection fees in connection with home sales by checking with the local office of the Department of Housing and Urban Development and Mr. Pearson's mortgage lender.

The Bureau of Reclamation disallowed reimbursement of the inspection fee, since the inspection was not required to complete the sale. Mr. Pearson believes reimbursement is justified because inspections were agreed upon in the purchase contract.

Incidental charges for transfer of a residence are reimbursable only if they are customarily paid by the seller or the purchaser, as the case may be, in the locality of the residence. Federal Travel Regulations, Para. 2 -6.2f (Supp. 4, Aug. 23, 1982), incorp. by ref., 41 C.F.R. Sec. 101-7.003 (1986). Consistent with these regulations, Comptroller General decisions deny reimbursement if an inspection is not required for the transfer of the ownership interest in the property or the security interest acquired by a mortgage lender in exchange for the loan to finance the purchase. See for example, Wayne V. Girton, B-185783, Apr. 29, 1976, where the expense was disallowed because the inspection was for the benefit of the purchaser and not his obligation as a required service customarily paid by purchasers.

The record before us does not show that Mr. Pearson incurred the inspection expense to satisfy an obligation customarily assumed by purchasers in the Denver area and necessary to complete the sales transaction. In accordance with the terms of his contract and his own statement, he obtained the inspection to reveal defects which would either be remedied for his personal benefit or be a justification to void the contract. In other words, the inspection was for the protection of his own property interest in the home.

Accordingly, the Bureau of Reclamation properly denied reimbursement of the inspection fee.

/1/ Ms. Amy Mitchell, Authorized Certifying Officer, Bureau of Reclamation, requested our decision.