Claim for Expenses Incurred in Foreclosure Sale

The Department of Agriculture requested a decision on the propriety of certifying for payment an employee's voucher for expenses incurred in connection with the foreclosure on her residence at her old duty station. The agency questioned whether a foreclosure sale was a residence transaction for which real estate expenses may be reimbursed. The employee was unsuccessful in her attempts to sell her residence and, when she defaulted by failing to make payment under the land sales contract by which she had purchased the property, the seller foreclosed. The property was sold at sheriff's sale pursuant to a writ of execution and order for summary judgment by the circuit court. The expenses for which the employee claimed reimbursement were incident to the judgment on the sheriff's sale. The applicable regulations specifically preclude reimbursement for costs of litigation. GAO has held that the term litigation as used under these regulations means a contest in a court of law to enforce a right, a judicial controversy, suit at law, and an action before a court. The expenses claimed by the employee were assessed incident to the judicial process of foreclosure, an action before a court. Accordingly, the claim was disallowed.