October
1, 2007
CBCA
804-RELO
In the Matter of WILLIAM K.
RAIFORD
William K. Raiford,
Chesapeake, VA, Claimant.
Marilyn Passori, Civilian
Personnel Division, Naval Network Warfare Command, Department of the Navy,
Norfolk, VA, appearing for Department of the Navy.
STEEL, Board
Judge.
This claim concerns an
employee=s entitlement to reimbursement of a real estate
commission incurred incident to a permanent change of station (PCS) move.
Background
Claimant, William K. Raiford,
a civilian employee of the Department of Defense, was notified on November 21,
2005, of a PCS from Dahlgren, Virginia, to Chesapeake, Virginia, and he
reported for duty at the new duty station on February 6, 2006. He sought reimbursement for the 7% real
estate broker=s commission he paid in connection with the sale of
his home in Fredericksburg, Virginia, at his old duty station. The reviewing official determined that the
usual and customary real estate commission in the area was 6%, not 7%, and only
reimbursed that amount. Claimant is
seeking to recover the 1% of sales price difference, or $4199.
Discussion
The Government may pay an
employee changing his permanent duty station expenses incurred in the sale of a
residence at his old duty station.
However, the reimbursement for brokerage fees and other expenses may not
exceed those customarily charged in the locality where the residence is
located. As a civilian employee of the
Department of Defense, claimant is subject to the Department=s Joint Travel Regulations (JTR), specifically JTR C14002-A.1, which states:
CBCA 804-RELO 2
1. Broker=s Fees or Real Estate Commission. A broker=s fee or
real estate commission for services in selling the residence is reimbursable,
but not in excess of rates generally charged for such services in the locality
of the old PDS. No such fee or
commission is reimbursable in connection with the purchase of a home at the new
PDS.
Mr. Raiford originally listed
his property with a realtor at a 6% of sales price commission. After eight months, because of a decline in
the market and a lack of interested buyers, he switched agents within the real
estate agency. At the new agent=s suggestion and in order to expedite the sale, Mr.
Raiford agreed to increase the commission by 1% to 7%. The house sold two months later, albeit at a
steep reduction from the original asking price.
The agency=s reviewing official, based her determination to only
allow a 6% commission on two grounds.
First, Mr. Raiford admits that he voluntarily increased the commission
to 7% for the purpose of inducing selling agents to expedite the sale of his
house. Second, the official reviewed ten
claims that were processed for other employees who transferred from the same
locality and determined that the usual and customary broker=s fee charged was 6%, the same fee that was originally
to have been charged to Mr. Raiford.
The JTR
does not allow for reimbursement of a higher rate where the higher commission
was needed to expedite a sale. Raymond
L. Hipsher, B-214555 (Aug. 28, 1984). Mr. Hipsher=s circumstances were nearly
identical to the claimant=s.
In Mr. Hipsher=s case, to which similar
regulations applied, the Comptroller General held that the regulations Ado not allow reimbursement for
sales commissions above the general area rate, even where the higher commission
rate was needed to expedite the sale.@ See also Calvin
T. Westmoreland, B-196517 (Feb. 19, 1980).
In a more
recent case, the General Services Board of Contract Appeals (GSBCA) found that,
while numerous claimants were able to show that the prevailing rate in their
locality was 7%, not 6%, and were thus entitled to an additional 1% of sales
price over that awarded, the one claimant who decided to pay 8.5% so as to
expedite the sale of his house was only entitled to the newly-determined
prevailing rate of 7%. Dan A.
Berkebile, GSBCA 14845-RELO, et al., 99-2 BCA & 30,492.
