B-239589, Dec 6, 1990

B-239589: Dec 6, 1990

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The residence would have been rented during the period covered by the claim. Smith: The issue is whether Ms. Washington. /1/ The pertinent facts are as follows. Smith was selected for a promotion and a transfer to the Seattle office of the EPA. The transaction was handled through an independent third party for purposes of a tax-free exchange of property. They were unable to sell their residence in California and therefore could not afford to purchase a residence in Washington. Which is owned by Ms. Smith is seeking reimbursement of the rent paid for 110 days as lodging expenses incurred while occupying temporary quarters. The EPA does not dispute the fact that the rental property was occupied by Ms.

B-239589, Dec 6, 1990

CIVILIAN PERSONNEL - Relocation - Temporary quarters - Actual subsistence expenses - Reimbursement - Eligibility - CIVILIAN PERSONNEL - Relocation - Temporary quarters - Determination - Criteria DIGEST: Transferred employee temporarily occupied rental property owned by her and her husband at new duty station. The employee paid monthly rent to a property management firm owned by her husband as the sole proprietor. employee who, while occupying temporary quarters incident to a permanent change of station, lodges in a residence which he or she owns and holds as rental property may not be paid lodging expenses absent clear and convincing evidence that, but for lodging there, the residence would have been rented during the period covered by the claim. Here, the employee has not presented such evidence and, therefore, the lodging portion of the TQSE may not be paid.

Sandra C. Smith:

The issue is whether Ms. Sandra C. Smith, an employee of the United States Environmental Protection Agency (EPA), may be reimbursed lodging expenses while occupying rental property which she owned with her husband incident to a change of official station from San Francisco, California, to Seattle, Washington. /1/

The pertinent facts are as follows. In May 1989, Ms. Smith was selected for a promotion and a transfer to the Seattle office of the EPA. She and her husband placed their home and the rental property which they owned in California on the market. In August, they exchanged the rental property in California for rental properties located in Washington. The transaction was handled through an independent third party for purposes of a tax-free exchange of property.

Ms. Smith and her family moved to Seattle in October. They were unable to sell their residence in California and therefore could not afford to purchase a residence in Washington. She and her family moved into one of the Washington rental properties on a temporary basis. She paid a monthly rent of $850 for the property to a property management firm, Cypress Enterprises, which is owned by Ms. Smith's husband as sole proprietor. Ms. Smith is seeking reimbursement of the rent paid for 110 days as lodging expenses incurred while occupying temporary quarters.

The EPA does not dispute the fact that the rental property was occupied by Ms. Smith and her family as a temporary residence and does not object to reimbursement for meals and incidental expenses. However, EPA does question whether the lodging expenses may be reimbursed as temporary quarters subsistence expenses when the employee is both the lessor and lessee of the temporary quarters dwelling. /2/

An employee's ownership of property which is occupied on a temporary basis does not necessarily preclude the employee from being reimbursed for temporary quarters subsistence expenses. /3/ However, an employee who, while occupying temporary quarters incident to a permanent change of duty station or a temporary duty assignment, lodges in a residence which he or she owns and holds as rental property, may not be paid lodging expenses absent clear and convincing evidence that, but for his or her lodging there, the residence would have been rented at all times during the period covered by the claim. /4/

Here, there is no clear and convincing evidence that, but for Ms. Smith and her family lodging in the Washington rental property, it would have been rented during the period covered by her claim. Absent such evidence, the claim by Ms. Smith that she should be reimbursed lodging expenses for the amount she paid as rent while temporarily occupying the Washington rental property does not meet the requirements of our decisions.

Accordingly, the claim before us for the lodging portion of the temporary quarters subsistence expenses incurred by Ms. Smith may not be paid.

/1/ The request was submitted by Mr. Joseph R. Neuroth, Financial Management Officer, United States Environmental Protection Agency.

/2/ Verified by informal contact with EPA officials.

/3/ Allan L. Franklin, B-222136, Sept. 19, 1986; John H. Curtis, B-191597, Nov. 8, 1978.

/4/ Doubtful or Fraudulent Travel Claims, B-230385, Jan. 16, 1990; Rodney J. Gardner, B-210755, May 16, 1983; George R. Staton, B-201574, Aug. 24, 1981.