Request for Reimbursement of Real Estate Broker's Commission

The Drug Enforcement Administration (DEA) requested an advance decision concerning whether an employee should be reimbursed for an additional 1 percent real estate broker's fee. The employee received reimbursement for 7 percent of the 8 percent real estate broker's fee for sale of his condominium incident to his transfer from Washington, D.C., to Texas. DEA refused to reimburse the employee in excess of 7 percent because it was told by the Department of Housing and Urban Development (HUD) that 7 percent was the customary and normal real estate commission charged by brokers in the Washington, D.C., area. The employee presented as evidence a letter from his broker which contended that condominium property was difficult to sell and that the higher commission was not uncommon. The claimant contended that the decision as to what percentage was reimbursable was arbitrary on the part of DEA. Federal Travel Regulations limit reimbursement to the amount customarily charged in the area. In considering similar cases, GAO has held that where HUD was consulted to determine what charges were customary in a locality, the information provided by HUD created a rebuttable presumption as to the prevailing rate. In this case, it held that the letter from the broker did not rebut this presumption and that use of the HUD rate was not arbitrary. Accordingly, the additional 1 percent claimed could not be reimbursed and the reclaim voucher could not be certified for payment.