Board of Contract Appeals General Services Administration Washington, D.C. 20405 _____________________ January 29, 1999 _____________________ GSBCA 14844-RELO In the Matter of WAYNE E. SMITH Wayne E. Smith, Howard Air Force Base, Panama, Claimant. Sonja D. McLean, Chief, Benefits Branch, Headquarters, Theater Support Brigade, Howard Air Force Base, Panama, appearing for Department of the Army. DeGRAFF, Board Judge. The claimant asks to be reimbursed for expenses he incurred when he sold his home as the result of a transfer from one duty station to another. The agency denied the claim upon the ground that the expenses were not customarily incurred by home sellers in the area. Because the claimant has established that the expenses in question were in fact customarily incurred by sellers in the area, we grant the claim in part. Background In November 1997, the Department of Defense (DoD) transferred Wayne E. Smith from Jacksonville, North Carolina to Panama. In connection with the transfer, DoD authorized reimbursement of the expenses that Mr. Smith incurred in selling his home in North Carolina. The purchaser of Mr. Smith s home obtained financing from the Department of Veterans Affairs (VA) and, as provided in the purchase contract, Mr. Smith paid all but $500 of the purchaser s closing costs. He paid a loan origination fee of one percent of the purchaser s loan amount ($1085), a flood certification fee for a service required by the purchaser s lender ($25), a title examination fee ($587), a title insurance premium ($112), recording fees ($34), and an assignment fee to the recorder of deeds ($10). DoD denied Mr. Smith s claim for reimbursement of these amounts because, according to DoD, these expenses are usually paid by purchasers, and not by sellers. Mr. Smith asked us to review DoD s denial of his claim and he provided us with letters from two real estate agents in Jacksonville, North Carolina. The agents explained that there are four military bases in their county and the majority of buyers in the Jacksonville area are military personnel who obtain their financing from the VA. Because the VA allows sellers to pay all of a purchaser s closing costs, it has become a necessary requirement and a standard practice for sellers in the Jacksonville area to pay all or a part of purchasers closing costs. Most sellers in the area pay all closing costs over $500, and some new home sellers pay all closing costs over $95. DoD did not have these letters available when it denied Mr. Smith s claim. Discussion Because Mr. Smith is a civilian employee of DoD, his claim is governed by volume 2 of the Joint Travel Regulations (JTR). In November 1997, the JTR provided that Mr. Smith s expenses were reimbursable if they were customarily incurred by sellers in the area and if they did not exceed amounts customarily charged in the locality. JTR C14002-A.3 (title examination fee and recording fees); C14002-A.4.a(2) (loan origination fee); C14002- A.4.a(8), (9), C14002-A.4.b (title insurance premium); C14002-A.6 (flood certification fee). DoD does not contend that the amounts claimed by Mr. Smith were excessive, but does contend that it was not customary for sellers to pay purchasers closing costs. Concerning the custom in the area, Mr. Smith provided evidence in the form of letters from two persons who have knowledge of real estate transactions in Jacksonville, North Carolina. The letters explain that it has become standard practice in that area for sellers to pay buyers closing costs, because most buyers obtain VA financing. Mr. Smith s evidence is consistent with that put forward by claimants in other areas whose buyers used VA financing. Floyd L. Craft, GSBCA 13698- RELO, 97-2 BCA 29,092; Brent T. Wahlquist, GSBCA 13721-RELO, 97-2 BCA 29,094; Dawn S. Daugherty, GSBCA 14065-RELO, 97-2 BCA 29,050. DoD has not offered any evidence to support its position. Instead, DoD simply states that the expenses claimed by Mr. Smith are not customarily paid by sellers in the area. We have no way of knowing what facts might support DoD s statement. Given the credible evidence provided by Mr. Smith and the absence of evidence from DoD, we conclude that Mr. Smith has established that the expenses he incurred were customarily incurred by sellers in the area. The JTR placed added conditions upon reimbursement for several of the items that are part of Mr. Smith s claim. The JTR provided that the loan origination fee could not exceed one percent of the loan amount. JTR C14002-A.4.a(2). Mr. Smith should be reimbursed for the loan origination fee because the fee that he paid did not exceed this limitation. Regarding title insurance, the JTR provided that a premium paid for lender s title insurance was a reimbursable miscellaneous expense, although a premium paid for owner s title insurance was not reimbursable unless it was a prerequisite either to financing or to the transfer of the property. JTR C14002-A.4.a(8), (9); C14002-A.4.b. We do not know whether the title insurance premium paid by Mr. Smith was for lender s title insurance or owner s title insurance. In order for Mr. Smith to be reimbursed for the title insurance premium, he will have to provide DoD with further information concerning the insurance. Finally, the JTR provided that other expenses, such as the flood certification fee, were reimbursable if the expenses were for a required service. JTR C14002-A.6. A service required by a lender is such a service. Elizabeth L. Atkeson, GSBCA 14223-RELO, 98-1 BCA 29,396 (well inspection fee); William D. Beller, GSBCA 13692-RELO, 97-2 BCA 29,153; Edward C. Brandt, GSBCA 13649-RELO, 97-2 BCA 29,054 (lender inspection fee); Pamela L. Swires, B-260724 (Sep. 21, 1995) (flood certificate fee). Here, the lender required the service paid for by the flood certification fee, and so Mr. Smith should be reimbursed for this expense. In summary, we grant Mr. Smith s claim except for the $112 he requests for a title insurance premium. If Mr. Smith believes that he should be reimbursed for the premium, he should provide DoD with whatever information it needs in order to evaluate his claim. __________________________________ MARTHA H. DeGRAFF Board Judge