Board of Contract Appeals General Services Administration Washington, D.C. 20405 _______________________________________________ October 13, 1998 _______________________________________________ GSBCA 14618-RELO In the Matter of JOHN H. CROSS, JR., John H. Cross, Jr., Palmyra, PA, Claimant. LTC Thomas G. Kane, Office of Staff Judge Advocate, Department of Military and Veterans Affairs, Fort Indiantown Gap, Annville, PA, appearing for Department of Military and Veterans Affairs of the Commonwealth of Pennsylvania. BORWICK, Board Judge. Mr. John H. Cross, claimant, a civilian employee of the Department of Defense (DoD), seeks reimbursement of $5000 worth of buyer's costs incurred in connection with the sale of his residence at his old permanent duty station. The agency denied the claim because it concluded that the seller's paying those costs was not customary in the locality as required by the Federal Travel Regulation (FTR) and the Joint Travel Regulations (JTR).[foot #] 1 We sustain the agency's decision; claimant has not established that the seller's payment of those costs was customary in the locality. On or about July 1997, the agency, in a permanent change of station (PCS) move, relocated claimant to Indiantown Gap, Pennsylvania. Claimant then sold his house in State College, Pennsylvania. As part of the sales transaction, claimant agreed to pay the following costs of the purchaser: Real estate transfer tax $1625.00 Legal fees including title insurance $1148.75 Endorsement to title insurance policy $75.00 ----------- FOOTNOTE BEGINS --------- [foot #] 1 The Staff Judge Advocate explains that in considering the claim, that office was acting as an agent of the United States pursuant to Title 32, United States Code. ----------- FOOTNOTE ENDS ----------- Appraisal fee $825.00 Home inspection fee $225.00 VA Funding fee $1101.25 [foot #] 2 Total $5000.00 Claimant submitted a reimbursement voucher claiming $15,180, including the $5000 of purchaser's costs which claimant/seller assumed. The agency determined that $10,180 of the claimed costs was allowable but that the $5000 for purchaser's closing expenses paid by claimant/seller was not allowable. As to those expenses, the agency submitted the question to two Staff Judge Advocates who independently came to the conclusion that the expenses were not reimbursable.[foot #] 3 The Staff Judge Advocate, in the second and final review, concluded: I have determined that expenses agreed to be paid by the seller in the amount of $5,000 be disallowed. I believe these expenses are not customarily paid by the seller of a residence. (Citations omitted.) If a seller wishes to "sweeten the pot" on the sale of his personal residence that is his prerogative. However, this can not be viewed as a "normal" closing expense. The Government should not be called upon to reimburse a seller's generosity. In response, claimant filed a claim at this Board, attempting to justify his entitlement to Government reimbursement of the $5000. Claimant states that the closing attorney documented disbursement of the $5000. He also admits that "if it was the [Staff Judge Advocate's] opinion that some, or even all of the $5,000 is not customarily paid by the seller and if he ----------- FOOTNOTE BEGINS --------- [foot #] 2 The total fee was $3250. [foot #] 3 According to the agency, two Staff Judge Advocates conducted independent reviews of claimant's request. In the package reviewed by the first Staff Judge Advocate, claimant had submitted a settlement sheet which did not itemize the $5000 worth of costs. The first Staff Judge Advocate called the seller's attorney and asked why the seller agreed to pay the buyer's costs. The seller's attorney stated that the transaction was structured to "sweeten the pot." Claimant requested and received a second level of review by a senior Staff Judge Advocate. Apparently, claimant submitted a second document package, which contained an amended settlement sheet itemizing the costs covered by the $5000 payment. The senior Staff Judge Advocate, a tax practitioner, came to the same conclusion as the first Staff Judge Advocate. ----------- FOOTNOTE ENDS ----------- itemized those expenses, I would have no recourse. Unfortunately, [the Staff Judge Advocate] did not itemize, I do not believe I was given a fair review of my settlement." Our rules place the burden on claimant "to establish . . . the liability of the agency and the claimant's right to payment." Rule 401(c). The JTR provide that certain specified miscellaneous expenses for the sale and purchase of a residence are reimbursable "provided they are customarily paid by the seller of a residence in the locality of the old [permanent duty station]." JTR C14002-A.4. The Federal Travel Regulation (FTR), which the JTR supplements, is to the same effect. 41 CFR 302- 6.2(d)(1) (1997). Where a seller of a house pays a purchaser's costs, we have held that the burden rests on the claimant to establish that in the locality, the cost is customarily paid by the seller rather than the buyer. Edward C. Brandt, GSBCA 13649- RELO, 97-2 BCA 29,054. In one matter we allowed reimbursement of such costs when the claimant submitted evidence that the seller paid certain buyer costs in ninety percent of the residential sales transactions over a five year period for a particular area. Brian Cooper, GSBCA 14269-RELO, 98-1 BCA 29,427. Here, the agency denied the claim because it did not consider a seller's payment of $5000 of buyer's costs to be customary in the locality. In response, claimant does nothing more than establish that he paid those costs. He does not establish that a seller's reimbursement of these buyer's costs is customary in the locality and the record does not contain evidence which establishes that a seller customarily pays the buyer's costs. We sustain the agency's decision. __________________________ ANTHONY S. BORWICK Board Judge