October 3, 1996 GSBCA 13797-RELO In the Matter of PATRICIA S. SNYDER Patricia S. Snyder, Orange Park, FL, Claimant. G. A. Terrill, Chief, Travel Division, Defense Finance and Accounting Service, Columbus, OH, appearing for Defense Finance and Accounting Service. GOODMAN, Board Judge. Ms. Patricia Snyder, a civilian employee of the Department of the Navy, sold her home in Riverdale, Georgia, upon being transferred to Jacksonville, Florida. Her Application for Reimbursement of Expenses Incurred by DOD Civilian Employee Upon Sale or Purchase of Residence Upon Change of Duty Station, DD Form 1705, was approved for the amounts claimed by Ms. Snyder by the approving official at her old duty station. However, some of the expenses which had been approved were disallowed by the disbursing office, since, in the opinion of that office, the costs were customarily paid by the borrower in the locality. The following costs totalling $1,610.55 were disallowed: Title Insurance, Lender's coverage $218.00 Recording Fees 47.00 Credit Report 60.00 Escrow Agent's Fee 16.50 Loan Origination Fee 793.00 State Revenue Stamps 201.05 Lender's Appraisal Fee 275.00 Ms. Snyder claims that the costs that she paid were customarily paid by sellers in Georgia. In appealing her claim, Ms. Snyder submitted to the disbursing officer a letter dated September 14, 1995, to her Congressman from the Acting Assistant Secretary of the United States Department of Housing and Urban Development (HUD) which states, in relevant part: Settlement costs are paid by buyers and sellers to close a mortgage, including payments for title insurance, survey, attorneys fees, and such prepaid items as taxes and hazard insurance. It is customary in Georgia for the seller to pay most closing costs, which generally equal 3 percent of the loan amount. Some closing costs have been set by the Department. For example, the origination fee may not exceed 1 percent of the loan amount, and the appraisal fee may not exceed $275. All the other fees, including credit report, attorney fees, property survey, title examination, title insurance, recording fees and taxes, home inspection fees, and test or treatment fees, are the actual costs incurred by the buyer or seller. The disbursing officer reviewed Ms. Snyder's claim and the letter from HUD and found it "contradictory to [JTR Vol II C14022] which indicates that the items she is requesting are paid by the borrower." Memorandum from Disbursing Officer to General Accounting Office (Feb. 12, 1996). The administrative report filed by the Defense Finance and Accounting Service states, in part: The disbursing office interpreted [the above language quoted from the HUD letter] to mean that the expenses in question are negotiable, and that Ms. Snyder agreed to pay the buyer's closing costs. Since the Joint Travel Regulation[s] requires that, in order to be reimbursed, expenses claimed must be reasonable in amount and customarily paid by the seller, doubt exists as to Ms. Snyder's entitlement to these expenses. By letter to this Board dated August 23, 1996, in response to the administrative report, Ms. Snyder stated: At no time did I negotiate with the buyer so as to intentionally increase closing costs to be paid by me so I could request reimbursement from the Government. Pursuant to 5 U.S.C.  5724a(a)(4), funds are available for reimbursement of real estate transaction expenses of the sale of the residence of an employee at the old station and the purchase of a home at the new official station required to be paid by the employee when the old and new official stations are located within the United States, its territories or possessions, and other specific locations. The Joint Travel Regulation reads, in relevant part: C14002 ALLOWABLE EXPENSES FOR SALE OR PURCHASE OF RESIDENCE A. Reimbursable Expense . . . . 2. Other advertising and Selling Expenses. . . . Customary costs of appraisal are also reimbursable. 3. Legal and Related Costs. To the extent such costs have not been included in broker s or similar services for which reimbursement is claimed under other categories, the following expenses are reimbursable with respect to the sale and purchase of residences if they are customarily paid by the seller of a residence at the old duty station . . . to the extent that they do not exceed amounts customarily charged in the locality of the residence: a. . . . where customarily furnished by the seller, the cost of a title insurance policy; . . . . c. related . . . recording fees; . . . . e. expense similar to those in items a through d above. 4. Miscellaneous Expenses a. Reimbursable Items. The expenses listed below are reimbursable in connection with the sale and/or purchase of a residence, provided they are customarily paid by the seller of a residence in the locality of the old official PDS . . . to the extent they do not exceed specifically stated limitations, or in the absence thereof, amounts customarily paid in the locality of the residence: . . . . (2) loan origination fees . . . . (3) cost of preparing credit reports; . . . . (5) state revenue stamps; (6) other fees and charges similar in nature to those listed above, unless specifically prohibited in subpar. b herein; . . . . (9) owner s title insurance policy, provided it is a prerequisite to financing or the transfer of property. b. Nonreimbursable Items. Except as otherwise provided in subpar. a, the following items of expense are not reimbursable: (1) owner s title insurance policy, record title insurance policy, mortgage insurance or insurance against loss or damage of property, and optional insurance paid for by the employee in connection with the purchase of a residence for the protection of the employee; There is nothing in this regulation that supports the disbursing officer's contention that the regulation indicates that the charges for which Ms. Snyder seeks reimbursement are "paid by the borrower." There also is no evidence that Ms. Snyder's payment of these charges was the result of negotiation with the buyer as alleged in the administrative report. Ms. Snyder claims that she paid such charges because it was customary for the seller to do so, and supplied credible evidence that it is customary in Georgia for the seller to pay closing costs. Under the circumstances of this case, the costs are clearly reimbursable to Ms. Snyder under JTR C14002 -- title insurance, lender's coverage [A.3.a], recording fees [A.3.c], credit report [A.4.a.(3)], escrow agent's fee [A.3.e], loan origination fee [A.4.a.(2)], state revenue stamps [A.4.a.5], and lender's appraisal fee [A.2]. Accordingly, Ms. Snyder is entitled to reimbursement for the costs disallowed by the disbursing office, in the amount of $1,610.55. ______________________ ALLAN H. GOODMAN Board Judge