B-239886, Nov 9, 1990

B-239886: Nov 9, 1990

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CIVILIAN PERSONNEL - Relocation - Residence transaction expenses - Broker fees - Reimbursement DIGEST: This summary letter decision addresses well established rules which have been discussed in previous Comptroller General decisions. Pedersen - Reimbursement of Real Estate Broker's Fee: This decision is in response to a request from Major Joan C. Pedersen was stationed in Mililani Town. Who was a licensed real estate agent for Stott Real Estate. Pedersen were charged a real estate broker's fee of $11. Pedersen were active licensed agents in Hawaii and were employed by Stott Real Estate. Pedersen was the selling agent. A commission was paid to her. Which were in effect when Mr. and Mrs.

B-239886, Nov 9, 1990

CIVILIAN PERSONNEL - Relocation - Residence transaction expenses - Broker fees - Reimbursement DIGEST: This summary letter decision addresses well established rules which have been discussed in previous Comptroller General decisions. To locate substantive decisions addressing this issue, refer to decisions indexed under the above listed index entry.

Hans C. Pedersen - Reimbursement of Real Estate Broker's Fee:

This decision is in response to a request from Major Joan C. Weishar, USA, Finance and Accounting Officer, U.S. Army Fort Belvoir. /1/ It concerns the entitlement of an employee of the Department of the Army to be reimbursed a broker's fee he paid for the sale of his residence incident to a transfer in September 1988. We conclude he may be reimbursed for the following reasons.

Mr. Hans C. Pedersen was stationed in Mililani Town, Hawaii, prior to his transfer to the continental United States in September 1988. His wife, who was a licensed real estate agent for Stott Real Estate, Inc., and joint owner of the residence, acted as agent in selling the residence incident to that transfer. At settlement, Mr. and Mrs. Pedersen were charged a real estate broker's fee of $11,700 paid to Stott Real Estate, Inc. The real estate firm in turn, paid Mrs. Pedersen $8,106 as a sales commission on the transaction.

Mr. Pedersen has supplied information showing that, if an individual maintains an active real estate license in Hawaii, he or she must conduct all real estate transactions through their employing real estate agency, and must be compensated for his or her services. Since both Mr. and Mrs. Pedersen were active licensed agents in Hawaii and were employed by Stott Real Estate, Inc., the sale of their residence had to be processed through that agency, and a broker's fee paid. Since Ms. Pedersen was the selling agent, a commission was paid to her.

Based on that information, the Office of the Staff Judge Advocate, Fort Belvoir, recommends that the broker's fee be reimbursed to Mr. Pedersen.

The regulations implementing 5 U.S.C. Sec. 5724a(a)(4) (1988), which were in effect when Mr. and Mrs. Pedersen sold their residence, /2/ authorize reimbursement of a broker's fee or real estate commission for services rendered in selling the employee's residence, but not in excess of rates generally charged in the locality of the old duty station. We have held that if payment of a broker's fee is a legally enforceable obligation, the fact that the employee's spouse, as real estate agent on the sale, receives a portion of that fee as a commission does not preclude reimbursement of the broker's fee. Robert J. Mihalovic, B-193201, June 19, 1979.

The decision in Mihalovic is controlling here. Since Mrs. Pedersen held an active real estate agent's license and was required to process all real estate transactions through her employing real estate agency, it is clear that Mr. Pedersen was legally obligated to pay the broker's fee, including his wife's commission. Therefore, the reclaim voucher for the broker's fee may be certified for payment.

/1/ The submission has been assigned Control No. 90-4 by the Per Diem, Travel and Transportation Allowance Committee.

/2/ Paragraph 2-6.2a of the Federal Travel Regulations (Supp. 4, Aug. 23, 1982), incorp. by ref., 41 C.F.R. Sec. 101-7.003 (1988) and paragraph C14002 of Volume 2, Joint Travel Regulations.