Matter of: Gregory A. Moore File: B-249311.2 Date: February 4, 1993

B-249311.2: Feb 4, 1993

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The agency's denial of additional reimbursement is upheld since the amount claimed exceeds the amount customarily paid by buyers in the area to close a residence purchase. DECISION The issue presented is whether Mr. The claim is denied. Transferred employees are given the option of utilizing as a lender the U.S. Mortgage Corporation is located in New Jersey. One of its lending requirements for out-of-state loans is that a local attorney prepare all documents. Moore was billed for and paid an attorney fee of $500. Attend a real estate closing is usually $200 or less. Which were time-consuming and entailed additional liability. The attorney also states that the necessary documents were received from Federal Express the day before the closing.

Matter of: Gregory A. Moore File: B-249311.2 Date: February 4, 1993

CIVILIAN PERSONNEL Relocation Residence transaction expenses Attorney fees Reimbursement Employee claims full reimbursement of an attorney fee paid incident to closing on the purchase of a residence at the new duty station. The employee used a mortgage company owned by the agency's relocation services contractor which required that a local attorney perform certain services and act as closing agent for the residence purchase. The agency partially denied the claim because the amount claimed exceeded the amount customarily paid by buyers in the area. The agency's denial of additional reimbursement is upheld since the amount claimed exceeds the amount customarily paid by buyers in the area to close a residence purchase.

DECISION The issue presented is whether Mr. Gregory A. Moore, an employee of the Department of Veterans Affairs (VA), may be fully reimbursed a $500 attorney fee he incurred incident to the purchase of a residence at his new duty station. For the reasons that follow, the claim is denied.

Mr. Moore transferred from Cincinnati, Ohio, to Iowa City, Iowa, in September 1991. As part of the VA Relocation Services Program, transferred employees are given the option of utilizing as a lender the U.S. Mortgage Corporation, a wholly owned subsidiary of the VA's relocation services contractor, PHH Homequity, which provides financing benefits and other services not offered by local lenders in the Iowa City area. The U.S. Mortgage Corporation is located in New Jersey, and one of its lending requirements for out-of-state loans is that a local attorney prepare all documents, supervise the real estate closing, assume liability for performing these functions, and prepare and issue a title guaranty commitment and policy.

Mr. Moore, in accordance with the lender's requirement, retained a local attorney who conducted the closing of the residence purchase and performed the other services required by the lender. Mr. Moore was billed for and paid an attorney fee of $500. The VA Loan Guaranty Officer, in Des Moines, Iowa, reduced the amount to $200 because the usual charges by local lenders for real estate closing and document preparation in Iowa City do not exceed $200.

Mr. Moore has appealed the partial denial and presented a claim for the additional $300. In support of his claim, Mr. Moore has presented a letter from his attorney who states that her normal fee to examine title, issue title opinions, and attend a real estate closing is usually $200 or less. However, in this case she acted as the closing agent and performed the other services required by the lender, which were time-consuming and entailed additional liability. The attorney also states that the necessary documents were received from Federal Express the day before the closing, and it was necessary to set aside 5 hours that day to prepare all loan documents and confer by telephone with the lender and the realtors.

Although an employee may be reimbursed for reasonable attorney fees for services rendered in connection with the purchase of a residence at the new duty station if the charges are customarily paid by the purchaser of a residence and are within the customary range of charges for such services in the locality, we are presented with a different issue here. The issue is the reasonable and customary charges for closing a residence purchase in the area of the employee's new duty station.

The FTR prescribes procedures for a review and administrative approval of real estate expenses by a responsible agency official. 41 C.F.R. Sec. 302- 6.3 (1992). The purpose of the review is to determine whether the expenses claimed are reasonable in amount and customarily paid by the purchaser of a residence at the new official station, as required by FTR Sec. 302- 6.2(c) (1992). Since a determination of reasonableness rests initially with the employing agency, we will not substitute our judgment for that of the agency unless it can be shown that the determination was arbitrary, capricious, or otherwise not according to law. Marion D. Bailey, 69 Comp. Gen. 638 (1990).

We believe that the VA Loan Guaranty Officer made a reasonable determination in this case that the amount claimed was in excess of the amount customarily paid in the area. He found that attorneys do not usually perform document preparation and closing services in the area. Based on examples of closing and document preparation charges by lenders in Iowa City as claimed by other VA employees, the VA Loan Guaranty Officer found that the amount of $200 was within the customary range of such fees paid by buyers in the area.

Accordingly, since the Federal Travel Regulation requires that costs are to be within the customary range of charges in the locality of the residence transaction, we concur with the agency's determination. Mr. Moore's reclaim for additional reimbursement of attorney fees is denied. See Judy Wynekoop, B-205503, June 2, 1982.