James A. Fairley

B-258932 Sep 19, 1995 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights The Housing and Urban Development office which monitors the real estate market in the area of his old duty station informed the agency that the customary commission fee in the locality is 6 percent. The employee's reimbursement is limited to that percentage. Or expense determined to be part of finance charges under the Truth in Lending Act or Regulation Z is reimbursable. Since the claimed expenses are identifiable as being lender finance charges incident to the extension of credit. If the fee is not part of the loan origination fee. Then it is an additional charge by the lender incident to the extension of credit and not reimbursable. The cost of such policy may be reimbursed only if it is a prerequisite to financing and required by the lender. View Decision Matter of: James A. Fairley File: B-258932 Date: September 19, 1995 A transferred employee sold his residence in the vicinity of his old duty station and claims reimbursement for a 6-percent broker's commission. Under 41 C.F.R. Sec. 302-6.2(a), real estate broker's fees may be paid but not in excess of the rates generally charged in the locality. The Housing and Urban Development office which monitors the real estate market in the area of his old duty station informed the agency that the customary commission fee in the locality is 6 percent. Since the commission generally charged by the real estate brokers there does not exceed 6 percent, the employee's reimbursement is limited to that percentage. Raymond L. Hipsher, B-214555, Aug. 28, 1984; and Gene C. Nicko, B-232313, Jan. 9, 1989. A transferred employee claims reimbursement for a document preparation fee he paid in connection with the purchase of a residence in the vicinity of his new duty station. Since 41 C.F.R. Sec. 302-6.2(c) (1994) specifically authorizes reimbursement for the cost of preparing conveyances and other related instruments, that expense may be allowed. James A. Schampers, 69 Comp.Gen. 573 (1990). A transferred employee claims reimbursement for an underwriter's fee and a tax service fee he paid in connection with the purchase of a residence in the vicinity of his new duty station. Under 41 C.F.R. Sec. 302-6.2(d)(2)(v) (1994), no fee, cost, or expense determined to be part of finance charges under the Truth in Lending Act or Regulation Z is reimbursable. Since the claimed expenses are identifiable as being lender finance charges incident to the extension of credit, they may not be reimbursed. George C. Souders, B-248457, Sept. 29, 1992. A transferred employee claims reimbursement for a processing fee charged by the lender in connection with the purchase of a residence in the vicinity of his new duty station. If the fee represents part of the administrative cost of processing paperwork associated with a loan origination fee, this charge may not be paid because the maximum amount allowable has already been paid as a loan origination fee. If the fee is not part of the loan origination fee, then it is an additional charge by the lender incident to the extension of credit and not reimbursable. William T. Bigby, B-221162, June 10, 1986. A transferred employee purchased a residence in the vicinity of his new duty station and paid for a separate owner's title insurance policy in addition to the lender's title insurance policy. He seeks reimbursement for the cost of the owner's policy. Under 41 C.F.R. Sec. 302-6.2(d)(1)(ix) (1994), the cost of such policy may be reimbursed only if it is a prerequisite to financing and required by the lender. Since there is nothing in the record to show that the owner's policy was required by the lender, the employee may not be reimbursed. Eldean K. Minary, B-250724, May 2, 1994. A transferred employee claims reimbursement for a homeowner's association transfer fee in connection with his purchase of a residence in the vicinity of his new duty station. Membership fees in cooperatively owned homes or apartments are deemed items of added value benefiting the purchaser. Since such memberships are deemed part of the ownership purchase price, a fee charged to transfer or acquire that ownership right is also part of the purchase price and may not be reimbursed. Nathaniel E. Green, 61 Comp.Gen. 352 (1982). DECISION Mr. Fairley, an employee of the Department of Veterans Affairs stationed in Biloxi, Mississippi, was transferred to Denver, Colorado, effective October 18, 1992. Incident to that transfer, he sold a residence in the Biloxi area and purchased a residence in the Denver area. Some of the expenses incurred for both the sale and the purchase were disallowed by the agency and by our Claims Group. Of the expenses disallowed, Mr. Fairley now contends that the following expenses should be allowed: Sale: The percent of the 6-percent real estate broker's fee disallowed.