______________________________ October 30, 1997 ______________________________ GSBCA 14223-RELO In the Matter of ELIZABETH L. ATKESON Elizabeth L. Atkeson, Arlington, TN, Claimant. Al LaBombard, Chief, Employee Service, Austin Finance Center, Department of Veterans Affairs, Austin, TX, appearing for Department of Veterans Affairs. DeGRAFF, Board Judge. In order for home purchase expenses to be reimbursable, they must be customarily paid by purchasers in the area where the home is located, and the amount paid must not exceed the amount that is customarily charged in the area. In addition, incidental expenses must be paid for required services in purchasing the home. Background In late 1995, Elizabeth L. Atkeson made a permanent change of station from California to Tennessee. Ms. Atkeson is an employee of the Department of Veterans Affairs (DVA). When Ms. Atkeson moved to Tennessee, she purchased a house there and asked the DVA to reimburse her for the expenses that she incurred in connection with the purchase. Ms. Atkeson financed the purchase of her house with a loan guaranteed by the DVA. As required by the DVA s regulations, a DVA loan guarantee officer responsible for the area where Ms. Atkeson s house is located reviewed her request for reimbursement to determine whether the expenses she claimed were reasonable in amount and customarily paid by purchasers in the area. The loan guarantee officer determined that the expenses Ms. Atkeson paid were reasonable in amount and customary in her area, with four exceptions. First, he determined that $50 of the amount charged for title insurance should be disallowed, because that amount was for owner s coverage. In Ms. Atkeson's area, even if a particular lender required such coverage for some reason, the customary practice in the general lending community was to make owner's coverage the owner's option. Second, he contacted people in the county where Ms. Atkeson's house was located and asked about the cost of a well inspection. He learned that the cost should not exceed $35, but Ms. Atkeson paid $75 for a well inspection. Third, the loan guarantee officer determined that a home inspection for which Ms. Atkeson paid $350 was not customary in her area, even if a particular lender asked for such an inspection. Fourth, he determined that paying separate charges for notary fees ($21.29) and cashier s checks ($13.25) was not customary in the area, even if payment of those amounts was necessary in Ms. Atkeson's case. The DVA's finance center reviewed Ms. Atkeson's claim and asked her about a fifth item of expense for which she claimed reimbursement. Ms. Atkeson paid $95 to have her home inspected after several repairs were made, and the finance center asked for a letter from the settlement company or the lender stating that these services were required in order to complete the purchase transaction. The finance center asked for this same information concerning the well inspection. Concerning the owner's title insurance, the finance center asked Ms. Atkeson whether she was required to buy this insurance as a precondition to purchasing her home. Ms. Atkeson provided information concerning each of the five items of expense about which the DVA had questions. Concerning the well inspection and the $95 repair inspection, Ms. Atkeson gave the DVA a copy of her lender's "Notification of Reasonable Value," prepared approximately three weeks before she purchased her house. The notification explained that the property would conform to the DVA's minimum property requirements if certain repairs were made to the house. The lender said that a reinspection was to be performed after the repairs were made. In addition, the notification said that the house's water supply had to be approved by local health authorities. Ms. Atkeson also provided the DVA with a letter from her mortgage servicing company that said that Ms. Atkeson was required to pay for a home inspection and for owner's title insurance in order to obtain financing. Ms. Atkeson explained that she considers the charges for notary fees and cashier's checks to be legal fees. She says that, although it might not be customary in the area where her house is located to pay these charges, she had to incur these expenses because her husband was in California when they purchased the house in Tennessee. The DVA denied Ms. Atkeson's claim for reimbursement for the five items of expense discussed above. Ms. Atkeson asks us to review the DVA's decision concerning her claim. Discussion When an employee is transferred from one permanent duty station to another, the employing agency can reimburse the employee for expenses that the employee is required to pay for purchasing a home at the new duty station. 5 U.S.C.  5724a (1994). In order for an expense to be reimbursable, it must be one that is customarily paid by the purchaser in the area where the house is located, and the amount must not exceed the amount that is customarily charged in the area. 41 CFR 302-6.2 (c), (d)(1), (f) (1996). The DVA loan guarantee officer responsible for determining whether the amounts paid by Ms. Atkeson were reasonable and were customarily paid by purchasers in her area determined that the $50 she paid for owner's title insurance, the $350 she paid for the home inspection, and the $34.54 she paid for notary fees and cashier's checks were not customarily paid by purchasers in her area. Ms. Atkeson's mortgage servicing company says that she was required to pay for owner's title insurance and for the home inspection, but this does not establish that it was customary for purchasers in her area to pay these expenses. Ms. Atkeson explained why she paid for notary fees and cashier's checks, but this does not establish that purchasers in her area customarily paid such expenses. The DVA properly decided not to reimburse Ms. Atkeson for the owner's title insurance, the home inspection, and the charges for notary fees and cashier's checks because purchasers in her area did not customarily pay such expenses. The DVA can reimburse Ms. Atkeson for an incidental expense, such as her well inspection, only if purchasers customarily pay for well inspections, if the amount she paid was within the amount customarily paid, and if the expense was for a "required" service in purchasing her home. 41 CFR 302-6.2(f). Ms. Atkeson established that her lender required her house's water supply to be approved by local health authorities, and that is why she paid for the well inspection. The DVA loan guarantee officer did not doubt that purchasers customarily paid for well inspections in Ms. Atkeson's area, but he determined that the amount that Ms. Atkeson paid for her well inspection was more than was usually charged. Ms. Atkeson has not established that the amount she paid was customarily charged in her area. The DVA can reimburse Ms. Atkeson $35 for the well inspection. The DVA loan guarantee officer did not challenge whether the $95 that Ms. Atkeson paid to have her house inspected after repairs were made was customarily paid and reasonable in amount. The repair inspection is, like the well inspection, an incidental expense and the DVA can reimburse Ms. Atkeson if the inspection was a required service in purchasing her home. Ms. Atkeson established that she paid for the repair inspection because her house needed repairs in order to satisfy the DVA's loan guarantee requirements, and her lender required the house to be inspected after those repairs were made. Therefore, the DVA can reimburse Ms. Atkeson $95 for her repair inspection. In summary, the DVA can reimburse Ms. Atkeson $35 for the well inspection and $95 for the repair inspection. The DVA properly decided not to reimburse Ms. Atkeson for the owner's title insurance, the home inspection, the notary fees and cashier's checks, and a portion of the well inspection. _______________________________ MARTHA H. DeGRAFF Board Judge