B-244501, Nov 19, 1991

B-244501: Nov 19, 1991

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Once an employee is offered and decides to use the services of a relocation company. He may not be reimbursed the expenses authorized to be paid under the Federal Travel Regulations (FTR ) that are similar to expenses that the agency will pay to the relocation company under the relocation service contract. 41 C.F.R. Kendrick's advertisement expense duplicates the advertising expenses that the relocation company incurred to sell his house and for which it was reimbursed by the agency. We have consistently held that the funding fee and tax service charge are parts of the finance charge collected by the lender as a condition of granting the loan. Such charges are not reimbursable since no part of the lender's finance charge may be reimbursed to the employee.

B-244501, Nov 19, 1991

PRECIS-UNAVAILABLE

Kenyan S. Kendrick:

The Bureau of Reclamation, Department of the Interior, has asked whether certain real estate transaction expenses that its employee Kenyon S. Kendrick incurred incident to his transfer from Jacksonville, Florida, to Boulder City, Nevada, may be reimbursed. We conclude that the expenses may not be reimbursed.

Mr. Kendrick seeks reimbursement for an advertising expense he incurred when he tried to sell his Florida house himself before turning it over to the agency's relocation company for sale. Once an employee is offered and decides to use the services of a relocation company, which Mr. Kendrick did in this case, he may not be reimbursed the expenses authorized to be paid under the Federal Travel Regulations (FTR ) that are similar to expenses that the agency will pay to the relocation company under the relocation service contract. 41 C.F.R. Sec. 302-12.5(b) (1990). Since Mr. Kendrick's advertisement expense duplicates the advertising expenses that the relocation company incurred to sell his house and for which it was reimbursed by the agency, his claim may not be paid. See David B. Pidduck, 69 Comp.Gen. 135 (1989).

In connection with the purchase of a house at his new duty station, Mr. Kendrick seeks reimbursement for a funding fee charged by the Department of Veterans Affairs and a tax service charge by the lender. We have consistently held that the funding fee and tax service charge are parts of the finance charge collected by the lender as a condition of granting the loan. Such charges are not reimbursable since no part of the lender's finance charge may be reimbursed to the employee. Anders E. Flodin, 64 Comp.Gen. 674 (1985); Kenneth R. Pedde, B-223797, Apr. 20, 1387; 41 C.F.R. Sec. 302-2(d) (2)(v).

Mr. Kendrick also wishes to be reimbursed for owner's title insurance he purchased to protect himself in addition to the title insurance he purchased for the lender, for which he has been reimbursed. Owner's title insurance is generally not reimbursable. 41 C.F.R. Sec. 302-6.2(d) (2) (i). See Rita H. Rains, B-237436, Dec. 20, 1989. Since Mr. Kendrick has not shown that the owner's title insurance was a prerequisite to obtaining his loan or for the transfer of ownership of his house, as required in 41 C.F.R. Sec. 302-6.2(d) (1) (ix), it may not be reimbursed.

The Bureau denied reimbursement of all the remaining expenses Mr. Kendrick incurred in the purchase of his Boulder City residence, including a closing fee, an inspection fee, a state tax stamp fee, and a trustee's fee, because they were charged to the seller on the real estate settlement sheet rather than to Mr. Kendrick, the purchaser. Mr. Kendrick states that he had to contract with the seller to pay all closing costs (including the aforementioned expenses), regardless of what was indicated on the settlement sheet, because housing was difficult to find in the Boulder City area.

Miscellaneous expenses specifically listed as being payable under the FTR, as well as incidental charges for required services, must be customarily paid by the seller or purchaser, as the case may be, before they can be reimbursed. Mark B. Gregory, B-229230, Mar. 14, 1988. this case neither the Bureau nor Mr. Kendrick has presented any evidence about whether the purchaser customarily pays the four aforementioned expenses. However, in the absence of substantive evidence to the contrary, information provided by the Department of Housing and Urban Development (HUD) about whether certain closing costs are customarily paid by the seller or purchaser is controlling. See 41 C.F.R. Sec. 302- 6.3(c). We have informally contacted HUD and determined that all of the four remaining expenses claimed by Mr. Kendrick are customarily paid by the seller. Even though it may be common for a purchaser to assume closing costs by contract ordinarily paid by the seller, as Mr. Kendrick did in this case, that does not mean such practice is customary. Bradley M. James, B-227567, Aug. 26, 1988. Thus, Mr. Kendrick may not be reimbursed for these expenses. accordingly, none of the claimed expenses may be reimbursed.