B-173783.141, OCT 9, 1975

B-173783.141, OCT 9, 1975

1. EMPLOYEE WAS RETRANSFERRED BACK TO FORMER DUTY STATION, AND MOVED INTO RESIDENCE THAT HE STILL OWNED. AGENCY DISALLOWED CLAIM FOR REIMBURSEMENT OF REAL ESTATE EXPENSES ARISING FROM PURCHASE OF NEW RESIDENCE ON GROUND THAT EMPLOYEE'S MOVE INTO OLD RESIDENCE CONSTITUTED PERMANENT QUARTERS. EMPLOYEE CONTENDED THAT SUCH MOVE WAS ONLY TEMPORARY, THAT HE SIGNED CONTRACT TO PURCHASE NEW HOME WITHIN 2 WEEKS, AND COMPLETED PURCHASE WITHIN 90 DAYS OF EFFECTIVE DATE OF TRANSFER. WHETHER QUARTERS ARE TEMPORARY OR PERMANENT IS BASED ON EMPLOYEE'S INTENT. HERE EMPLOYEE'S ACTIONS WERE CONSISTENT WITH TEMPORARY OCCUPANCY. THEREFORE REIMBURSEMENT IS NOT BARRED. 2. EMPLOYEE, RETRANSFERRED BACK TO FORMER DUTY STATION, PURCHASED HOUSE THERE EVEN THOUGH HE STILL OWNED RESIDENCE HE HAD OCCUPIED DURING PRIOR TOUR OF DUTY. HIS CLAIM FOR REIMBURSEMENT OF EXPENSES OF PURCHASE WAS DENIED BY AGENCY, CITING FTR PARA. 2-6.1E, AND STATING THAT THE TRANSACTION WAS NOT REASONABLY RELATED TO THE TRANSFER. THAT PARAGRAPH APPLIES ONLY WHEN AN EXTENSION OF THE 1-YEAR SETTLEMENT LIMITATION IS REQUESTED. SINCE SETTLEMENT WAS WITHIN 90 DAYS AFTER EFFECTIVE DATE OF TRANSFER, THAT PARAGRAPH DOES NOT APPLY AND DOES NOT BAR PAYMENT OF CLAIM, WHICH MAY BE PAID IF OTHERWISE CORRECT.

MR. RAY L. BOMAN - REAL ESTATE EXPENSES - RETRANSFER TO FORMER DUTY STATION:

THIS MATTER INVOLVES A CLAIM, SUBMITTED DIRECTLY TO THIS OFFICE, FOR REAL ESTATE EXPENSES INCURRED INCIDENT TO A TRANSFER. BECAUSE B 182572, ALSO DECIDED TODAY, WHICH PRESENTS SUBSTANTIALLY THE SAME LEGAL ISSUES WAS PENDING, AN ADMINISTRATIVE REPORT ON THE INSTANT CLAIM WAS REQUESTED, INSTEAD OF BEING REFERRED TO OUR TRANSPORTATION AND CLAIMS DIVISION FOR INITIAL SETTLEMENT.

BY FEDERAL AVIATION ADMINISTRATION (FAA) TRAVEL ORDER NO. D-2010-032, DATED MAY 11, 1973, MR. RAY L. BOMAN WAS TRANSFERRED FROM SALT LAKE CITY, UTAH, TO AURORA, COLORADO, REPORTING ON JUNE 18, 1973. INSTEAD OF SELLING HIS RESIDENCE, LOCATED AT 3033 SOUTH 400 WEST, BOUNTIFUL, UTAH, IN JULY 1973, MR. BOMAN LEASED IT FOR 1 YEAR WITH AN OPTION FOR THE LESSEE TO RENEW FOR AN ADDITIONAL 2 YEARS. MR. BOMAN PURCHASED A RESIDENCE AT HIS NEW DUTY STATION AT AURORA.

UNDER THE AUTHORITY OF FAA TRAVEL ORDER NO. D-2104/001, DATED JULY 1, 1974, MR. BOMAN WAS TRANSFERRED FROM AURORA, COLORADO, BACK TO SALT LAKE CITY, UTAH, REPORTING ON JULY 1, 1974. THE FAA REPORT STATES THAT THE DATE ON THIS TRAVEL ORDER SHOULD HAVE BEEN JUNE 25, 1974. FOR PURPOSES OF THIS DECISION IT DOES NOT MATTER WHICH DATE IS USED.

IN MID-JUNE 1974, MR. AND MRS. BOMAN TOOK A "HOUSE HUNTING" TRIP TO SALT LAKE CITY TO LOOK FOR A NEW RESIDENCE. IN HIS LETTER TO US, MR. BOMAN STATED THAT THEY LOCATED A SUITABLE HOME AND, ALTHOUGH THEY DID NOT MAKE A FIRM OFFER AT THAT TIME, THEY NOTIFIED THE REALTOR OF THEIR INTEREST AND AGREED TO MAKE A FINAL DECISION WHEN THEY RETURNED TO THE AREA. ON JULY 1, 1974, MR. BOMAN'S HOUSEHOLD GOODS WERE DELIVERED TO THE HOUSE HE STILL OWNED IN BOUNTIFUL, UTAH. MR. BOMAN STATED THE HOUSE HAD BECOME UNEXPECTEDLY VACANT WHEN THE LESSEE DECIDED NOT TO RENEW AND THAT, TO SAVE TEMPORARY QUARTERS EXPENSES, HE AND HIS FAMILY MOVED INTO THE HOUSE ON A TEMPORARY BASIS WHILE COMPLETING THE PURCHASE OF THE NEW HOME THAT HE AND HIS WIFE HAD SELECTED. ON JULY 13, 1974, MR. BOMAN SIGNED A CONTRACT TO PURCHASE A HOME LOCATED AT 2506 SOUTH 900 EAST, BOUNTIFUL, UTAH, AND THE SETTLEMENT TOOK PLACE ON SEPTEMBER 24, 1974. SOMETIME BETWEEN SEPTEMBER 24, 1974, AND OCTOBER 29, 1974, MR. BOMAN MOVED INTO HIS NEW RESIDENCE. ON OCTOBER 9, 1974, MR. BOMAN SUBMITTED A CLAIM FOR REIMBURSEMENT OF EXPENSES INCURRED INCIDENT TO THIS PURCHASE IN THE AMOUNT OF $236.75.

ON MARCH 28, 1975, MR. BOMAN WAS NOTIFIED THAT THE FAA HAD DENIED HIS CLAIM. THE DENIAL STATED SIMPLY THAT:

"ATTACHED VOUCHER IS NOT REIMBURSABLE AS OUR RECORDS SHOW 10,060# OF HHG WERE MOVED INTO PERMANENT RESIDENCE LOCATED AT 3033 SOUTH-WEST, BOUNTIFUL, UTAH."

MR. BOMAN THEN SUBMITTED HIS CLAIM DIRECTLY TO THIS OFFICE. IN RESPONSE TO OUR REQUEST, THE FAA ON JUNE 23, 1975, SUBMITTED A COMPLETE REPORT ON THIS MATTER. INCLUDED IN THE REPORT IS A MEMORANDUM DATED MAY 30, 1975, FROM THE CHIEF OF THE ACCOUNTING DIVISION, WESTERN REGION, TO THE CHIEF OF THE FINANCIAL SYSTEMS DIVISION WHICH STATES THAT ON JULY 1, 1974, "MR. BOMAN MOVED INTO PERMANENT QUARTERS, THE RESIDENCE WHICH HE OWNED ***." THE MEMORANDUM SUPPORTS THE DENIAL OF THE CLAIM AS FOLLOWS:

"2. DOUBT OR REASON FOR FORWARDING THIS CLAIM. MR. BOMAN CONTENDS THAT HE SHOULD BE ALLOWED REIMBURSEMENT OF EXPENSES IN CONNECTION WITH THE PURCHASE OF ANOTHER RESIDENCE WHEN HE IS ALREADY LIVING IN A RESIDENCE WHICH HE OWNS. THE DISALLOWANCE WAS MADE BASED ON THE FACT THAT MR. BOMAN WAS LIVING IN A PERMANENT RESIDENCE WHICH HE OWNED PRIOR TO THE TIME HE MADE A COMMITMENT TO PURCHASE ANOTHER RESIDENCE. WE BELIEVE THE INTENT OF REGULATIONS WAS NOT TO REIMBURSE EXPENSES FOR THE PURCHASE OF A RESIDENCE WHEN THE EMPLOYEE WAS RESIDING IN A RESIDENCE WHICH HE ALREADY OWNED. THE FACT THAT MR. BOMAN OWNED A RESIDENCE IN THE AREA HAD NO BEARING ON OUR DECISION, ONLY THAT HE WAS LIVING IN IT AT THE TIME HE MADE A COMMITMENT TO PURCHASE ANOTHER RESIDENCE.

"3. DISPOSITION BELIEVED TO BE PROPER. WE DO NOT BELIEVE THE RESIDENCE TRANSACTION WAS REASONABLY RELATED TO THE TRANSFER OF OFFICIAL STATION. MR. BOMAN WAS LIVING IN A RESIDENCE WHICH HAD BEEN HIS RESIDENCE WHEN PREVIOUSLY HEADQUARTERED IN SALT LAKE CITY AND STILL OWNED WHEN HE CONTRACTED TO PURCHASE ANOTHER RESIDENCE AFTER RETURNING TO THE SAME AREA. ACCORDINGLY, IT IS OUR OPINION THAT THE CLAIM SHOULD BE DISALLOWED."

IN A SUBSEQUENT MEMORANDUM DATED JUNE 13, 1975, FROM THE DIRECTOR OF ACCOUNTING AND AUDIT TO THE DIRECTOR OF MANAGEMENT SYSTEMS, THE DENIAL OF MR. BOMAN'S CLAIM IS JUSTIFIED ON THE FOLLOWING BASIS:

"THE DETERMINATION TO DISALLOW MR. BOMAN REIMBURSEMENT OF EXPENSES INCURRED IN CONNECTION WITH THE PURCHASE OF ANOTHER RESIDENCE WAS BASED UPON AN INTERPRETATION OF THE ELIGIBILITY REQUIREMENTS SET FORTH IN FEDERAL TRAVEL REGULATIONS, FPMR 101-7. PARAGRAPH 2-6.1E OF THESE REGULATIONS REQUIRES THAT A DETERMINATION BE MADE THAT THE PARTICULAR RESIDENCE TRANSACTION UPON WHICH THE CLAIMED ALLOWANCES ARE BASED IS REASONABLY RELATED TO THE OFFICIAL TRANSFER OF STATION. MR. BOMAN WAS LIVING IN A RESIDENCE WHICH HAD BEEN HIS RESIDENCE WHEN PREVIOUSLY HEADQUARTERED IN SALT LAKE CITY AND STILL OWNED WHEN HE CONTRACTED TO PURCHASE ANOTHER RESIDENCE AFTER RETURNING TO THE SAME AREA. ON THIS BASIS, IT WAS DETERMINED THAT THE RESIDENCE TRANSACTION WAS NOT REASONABLY RELATED TO THE TRANSFER."

THE STATUTORY AUTHORITY FOR THE REIMBURSEMENT OF REAL ESTATE EXPENSES INCIDENT TO A TRANSFER IS 5 U.S.C. SEC. 5724A (1970) WHICH PROVIDES, IN PERTINENT PART, THAT:

"(4) EXPENSES OF THE SALE OF THE RESIDENCE (OR THE SETTLEMENT OF AN UNEXPIRED LEASE) OF THE EMPLOYEE AT THE OLD STATION AND PURCHASE OF A HOME AT THE NEW OFFICIAL STATION REQUIRED TO BE PAID BY HIM WHEN THE OLD AND NEW OFFICIAL STATIONS ARE LOCATED WITHIN THE UNITED STATES, ITS TERRITORIES OR POSSESSIONS, THE COMMONWEALTH OF PUERTO RICO, OR THE CANAL ZONE. HOWEVER, REIMBURSEMENT FOR BROKERAGE FEES ON THE SALE OF THE RESIDENCE AND OTHER EXPENSES UNDER THIS PARAGRAPH MAY NOT EXCEED THOSE CUSTOMARILY CHARGED IN THE LOCALITY WHERE THE RESIDENCE IS LOCATED, AND REIMBURSEMENT MAY NOT BE MADE FOR LOSSES ON THE SALE OF THE RESIDENCE. THIS PARAGRAPH APPLIES REGARDLESS OF WHETHER TITLE TO THE RESIDENCE OR THE UNEXPIRED LEASE IS IN THE NAME OF THE EMPLOYEE ALONE, IN THE JOINT NAMES OF THE EMPLOYEE AND A MEMBER OF HIS IMMEDIATE FAMILY, OR IN THE NAME OF A MEMBER OF HIS IMMEDIATE FAMILY ALONE."

SECTION 5724(A) OF TITLE 5, U.S. CODE, REQUIRES THAT A FINDING BE MADE THAT A TRANSFER IS IN THE INTEREST OF THE GOVERNMENT. AS WE HELD IN B- 182572, ALSO DECIDED TODAY, ONCE THAT FINDING IS MADE CERTAIN BENEFITS FLOW TO THE TRANSFERRED EMPLOYEE, RESTRICTED ONLY BY THE TERMS OF THE IMPLEMENTING REGULATIONS.

AT ALL TIMES RELEVANT TO THIS DECISION, THE GOVERNING REGULATIONS HAVE BEEN THE FEDERAL TRAVEL REGULATIONS, FPMR 101-7 (MAY 1973) (FTR). JUST AS THE STATUTE DOES, FTR PARA. 2-1.3 REQUIRES THAT THE TRANSFER BE IN THE INTEREST OF THE GOVERNMENT AND NOT PRIMARILY FOR THE CONVENIENCE OF THE EMPLOYEE. THERE ARE OTHER INSTANCES WHERE SPECIFIC AGENCY DETERMINATIONS MUST BE MADE. PARAGRAPH 2-1.5B OF THE FTR REQUIRES THAT CERTAIN DETERMINATIONS BE MADE WHEN THE TRANSFER IS A "SHORT DISTANCE" MOVE. PARAGRAPH 2-4.1 OF THE FTR REQUIRES THAT AN AGENCY SPECIFICALLY AUTHORIZE "HOUSE HUNTING" TRIPS. WE KNOW OF NO SIMILAR PROVISION, HOWEVER, THAT REQUIRES A SPECIFIC AGENCY DETERMINATION TO BE MADE GENERALLY AUTHORIZING THE REIMBURSEMENT OF REAL ESTATE EXPENSES. THE RIGHT TO BE REIMBURSED FOR REAL ESTATE EXPENSES VESTS AS SOON AS IT HAS BEEN DETERMINED THAT A TRANSFER IS IN THE INTEREST OF THE GOVERNMENT AND THE TRANSFER HAS BEEN CONSUMMATED.

IN THIS CASE, AS NOTED ABOVE, THE FAA WESTERN REGION MADE A DETERMINATION THAT, WHEN MR. BOMAN AND HIS FAMILY MOVED IMMEDIATELY INTO THEIR OLD HOUSE UPON THEIR RETURN TO SALT LAKE CITY, IT WAS INTENDED TO BE THEIR PERMANENT RESIDENCE. WE HAVE CONSISTENTLY HELD THAT THE DETERMINATION AS TO THE TYPE OF QUARTERS, TEMPORARY OR PERMANENT, OCCUPIED BY AN EMPLOYEE, IS BASED UPON THE INTENT OF THE EMPLOYEE WHEN HE MOVES INTO THOSE QUARTERS. SEE B-174971, FEBRUARY 28, 1972; B-179870, SEPTEMBER 26, 1974; AND B- 182107, FEBRUARY 4, 1975. IN THIS CASE, MR. BOMAN RETURNED TO SALT LAKE CITY ON A PRETRANSFER HOUSE HUNTING TRIP, EXECUTED A CONTRACT TO PURCHASE ANOTHER HOUSE WITHIN 2 WEEKS AFTER HIS ARRIVAL AT HIS NEW DUTY STATION, AND SETTLED THE PURCHASE WITHIN 90 DAYS AFTER HIS ARRIVAL. ALL OF THESE ACTIONS ARE CONSISTENT WITH HIS CLAIM THAT HE WAS OCCUPYING HIS FORMER RESIDENCE ONLY ON A TEMPORARY BASIS UNTIL HE COULD OCCUPY THE NEW HOME HE HAD CONTRACTED TO PURCHASE. ACCORDINGLY, WE HOLD THAT REIMBURSEMENT OF REAL ESTATE EXPENSES INCURRED BY MR. BOMAN INCIDENT TO THE PURCHASE OF HIS NEW HOME IS NOT BARRED BY HIS TEMPORARY OCCUPANCY OF HIS FORMER RESIDENCE.

AS NOTED ABOVE, THE FAA DIRECTOR OF ACCOUNTING AND AUDIT CITED FTR PARA. 2-6.1E IN SUPPORT OF THE DISALLOWANCE OF MR. BOMAN'S CLAIM. THAT SECTION PROVIDES THAT:

"E. TIME LIMITATION. THE SETTLEMENT DATES FOR THE SALE AND PURCHASE OR LEASE TERMINATION TRANSACTIONS FOR WHICH REIMBURSEMENT IS REQUESTED ARE NOT LATER THAN 1 (INITIAL) YEAR AFTER THE DATE ON WHICH THE EMPLOYEE REPORTED FOR DUTY AT THE NEW OFFICIAL STATION. UPON AN EMPLOYEE'S WRITTEN REQUEST THIS TIME LIMIT FOR COMPLETION OF THE SALE AND PURCHASE OR LEASE TERMINATION TRANSACTION MAY BE EXTENDED BY THE HEAD OF THE AGENCY OR HIS DESIGNEE FOR AN ADDITIONAL PERIOD OF TIME, NOT TO EXCEED 1 YEAR, REGARDLESS OF THE REASONS THEREFOR SO LONG AS IT IS DETERMINED THAT THE PARTICULAR RESIDENCE TRANSACTION IS REASONABLY RELATED TO THE TRANSFER OF OFFICIAL STATION."

ALTHOUGH THIS PARAGRAPH REQUIRES A DETERMINATION THAT THE PARTICULAR TRANSACTION REASONABLY RELATES TO A TRANSFER, SUCH A DETERMINATION IS TO BE MADE ONLY WHEN AN EXTENSION OF THE 1-YEAR SETTLEMENT DATE LIMITATION IS SOUGHT. THIS PARAGRAPH DOES NOT AUTHORIZE OR PERMIT AN ADMINISTRATIVE DETERMINATION IN ALL CASES THAT A REAL ESTATE TRANSACTION RELATES TO A TRANSFER. MR. BOMAN DID NOT REQUEST AN EXTENSION OF THE SETTLEMENT DATE LIMITATION; IT WAS NOT NECESSARY SINCE HE COMPLETED THE PURCHASE OF A NEW HOME WITHIN 90 DAYS AFTER THE EFFECTIVE DATE OF HIS TRANSFER. THEREFORE, FTR PARA. 2-6.1E HAS NO APPLICABILITY TO MR. BOMAN'S CLAIM.

AS STATED ABOVE, THE RIGHT TO BE REIMBURSED FOR TRANSFER RELATED REAL ESTATE EXPENSES IS AUTHORIZED BY STATUTE ONCE IT IS DETERMINED THAT A TRANSFER IS IN THE INTEREST OF THE GOVERNMENT, UNLESS SPECIFICALLY RESTRICTED BY THE IMPLEMENTING REGULATIONS. WE FIND NOTHING IN THE REGULATIONS THAT RESTRICTS MR. BOMAN'S RIGHT TO BE REIMBURSED FOR THE CLAIMED EXPENSES.

ACCORDINGLY, MR. BOMAN'S CLAIM SHOULD BE PAID AFTER IT IS EXAMINED TO INSURE THAT THE ITEMS CLAIMED ARE CUSTOMARILY PAID BY THE PURCHASER IN THE LOCAL AREA AND THAT THE AMOUNTS CLAIMED DO NOT EXCEED THE AMOUNTS CUSTOMARILY CHARGED IN THE AREA, AND ARE ALLOWABLE UNDER THE PROVISIONS OF THE FTR. FOLLOWING THAT EXAMINATION, THE ALLOWABLE ITEMS IN THE CLAIM MAY BE PAID WITHOUT FURTHER REFERENCE TO THIS OFFICE.