Board of Contract Appeals
                 General Services Administration
                      Washington, D.C. 20405
      
                      _____________________

                         February 7, 2006
                      _____________________


                         GSBCA 16764-RELO


                  In the Matter of ANDREW PEREZ


     Andrew Perez, New Orleans, LA, Claimant.

     Yvonne Barbier, Acting Chief, Local Sponsor and Inleasing Acquisition Branch,
United States Army Corps of Engineers, Department of the Army, New Orleans LA,
appearing for Department of the Army.

NEILL, Board Judge.

     Claimant, Mr. Andrew Perez, is a civilian employee of the Army Corps of Engineers. 
He asks that we review his agency's denial of certain costs he incurred in conjunction with
the purchase of a residence at his new permanent duty station (PDS) in New Orleans,
Louisiana.  For the reasons set out below, we conclude that two of the costs claimed are
allowable.  As to whether the third cost claimed is reimbursable, this will depend on Mr.
Perez's plan for utilizing his new residence.  
 
                            Background

     On May 3, 2005, Mr. Perez went to settlement on his new residence in New Orleans. 
The real estate transaction expenses on which he and his agency remain in disagreement are: 
an appraisal fee of $450, title insurance in the amount of $497, and courier fees amounting
to $60.

     With regard to Mr. Perez's claim for reimbursement of the $450 appraisal fee, the
agency has awarded him no more than $225.  The agency bases its denial of the remaining
portion of the $450 fee on section C14000-F.2.a of the Department of Defense Joint Travel
Regulations (JTR), to which Mr. Perez is subject as a civilian employee of the Department. 
This provision of the JTR states that if the employee's residence is a duplex or another type
of multiple occupancy dwelling which is occupied only partially by the employee, expenses
shall be reimbursed on a pro rata basis.  

     As to the second item still in dispute, the agency has advised Mr. Perez that it will
reimburse him no more than $30 for the cost of the lender's title insurance.  Its reason for
limiting reimbursement to this amount is that the settlement sheet itself states that Mr. Perez
paid $30 for lender's title insurance coverage and $804 for owner's coverage.  Since JTR
C14002-A.4.a(8) provides for reimbursement only of the cost of title insurance purchased
by the employee for the protection of the lender, the agency has concluded that
reimbursement of the cost of the title insurance cannot go beyond the $30 shown on the
settlement sheet as the cost of that insurance.  

     Finally, the agency denied Mr. Perez's claim of $60 for courier services on the
ground that the claimant failed to demonstrate that these services were actually required at
the time -- as opposed to their being used merely for reasons of personal convenience.     

                            Discussion

     With regard to the appraisal fee of $450, Mr. Perez concedes that the residence he has
purchased at his new PDS is a duplex, but he believes that he should be reimbursed at least
the amount of what an appraisal of a single family dwelling would have cost.  In support of
his position, Mr. Perez has submitted a letter from his lender stating that the appraiser who
completed the appraisal of Mr. Perez's home typically charges $300 for an appraisal of a
single-family home.  This amount is said to be the minimum fee for a residential appraisal
and is not based upon the value of the home.  His request for reimbursement of the appraisal
fee does not go beyond this amount.    

     Neither the agency nor the claimant has addressed what we consider to be the key
factor in applying JTR C14000-F.2.a.  This limitation of reimbursement of an appraisal fee 
to the claimant's pro rata share applies only to situations where the dwelling is only partially
occupied by the claimant.  Because the dwelling is a duplex, the agency understandably has
assumed that the building will be occupied only partially by Mr. Perez.  Although Mr. Perez
apparently believes that his duplex should be treated as a single family dwelling, he, 
nevertheless, has not explicitly addressed the issue of whether he plans to occupy it in whole
or in part.  

     Conceivably Mr. Perez, as other owners of a duplex do on occasion, plans to remove
walls and partitions in the building with the intent of turning it into a single family unit.  If
Mr. Perez can reasonably demonstrate that the duplex which he has purchased is to be used
as a single family dwelling, then the $300 he seeks should be paid to him.  If this is not his
intention, the agency has acted correctly in limiting reimbursement, pursuant to JTR
C14000-F.2.a, to what it assumes to be Mr. Perez's pro rata share.  If the agency's
assumption that the pro rata share is fifty percent is incorrect -- which it would be, for
example, if one of the units is significantly larger than the other -- then it is incumbent on
Mr. Perez to provide credible evidence of what his pro rata share actually is. 

     The agency's determined adherence to the figures shown on the settlement sheet as
the costs of owner's and lender's title insurance is not in keeping with previous decisions
of this Board dealing with similar facts.  In reviewing the costs listed for title insurance, it
is obvious to us that the cost of the title insurance purchased for the lender has been deeply
discounted when compared to the cost of the title insurance purchased by the new owner to
protect his own interest.  We have in the past had occasion to comment on situations such
as this.  Typically, the transferred employee elects to take advantage of an insurer's offer to
sell two title insurance policies, one covering the lender's interest and another covering the
employee's interest.  At settlement, the employee finds that, in pricing the two policies, the
insurer has shifted a disproportionate number of the costs associated with the two policies
from the lender's policy to the owner's policy.  

     When this occurs, the transferred employee stands to lose much of his or her
relocation benefit if reimbursement for the cost of lender's title insurance is held to the
amount of the discounted price shown on the settlement sheet.  Of course this result can be
avoided if the employee simply declines the insurer's offer to provide a second policy
covering the employee's interest.  As we have previously pointed out, however, this is hardly
a practice to be encouraged.  The purchase of owner's title insurance could well be in the
transferred employee's interest, and the decision to purchase it should not result in the partial
forfeiture of a benefit to which the employee would otherwise be entitled.  

     The solution to this problem used by the General Accounting Office (now the
Government Accountability Office), our predecessor in settling travel and relocation claims
of government employees, was to approve reimbursement of the expense up to, but not in
excess of, the cost of the lender's title insurance if the coverage had been purchased
separately -- regardless of how the cost of the policies might be apportioned on the
settlement sheet.  We have concluded that this approach is both practical and sensible and
have adopted it as our own.  Nadab O. Bynum, GSBCA 16715-RELO, 05-2 BCA   33,100; 
Thomas Gene Gallogly, GSBCA 15891-RELO, 03-1 BCA   32,091 (2002).

     In support of his claim for reimbursement for the cost of the lender's title insurance, 
Mr. Perez has provided a letter from the settlement agent who presided at the closing on Mr.
Perez's new residence.  The agent writes that, had Mr. Perez purchased title insurance for
the lender alone, the charge would have been $497.  In keeping with our earlier decisions,
we find this sufficient support for Mr. Perez's claim for reimbursement of that amount.  

     In response to the agency's denial of his claim for reimbursement of courier fees in
the amount of $60, Mr. Perez explains that these charges were incurred to meet a
requirement of his lenders.  The settlement sheet shows that, to fund the purchase of his new
home, Mr. Perez secured two mortgages.  The costs associated with each mortgage are
shown on separate pages of the settlement sheet, and on each page, a courier fee of $30 is
listed as an additional expense.  Mr. Perez explains that these charges covered the cost of
overnight transmission of settlement documentation to each of the lenders in accordance
with their requirement that this documentation be provided to them within twenty-four hours
of closing.  A letter in the record from one of the lenders confirms this fact.  We find this
information sufficient to conclude that the charges in question were not incurred by the
lender but, rather, by someone working on behalf of the claimant and for a reason other than
the personal convenience of the claimant.  They are, therefore, reimbursable.  See Martha
V. Hooks, GSBCA 16754-RELO (Jan. 19, 2006); Douglas Tastad, GSBCA 16543-RELO,
05-1 BCA   39,957; Kathy D. Peter, GSBCA 16114-RELO, 04-1 BCA   32,424 (2003) (and
cases cited therein).  

                             Decision

     Mr. Perez's claims for reimbursement of the cost of lender's title insurance in the
amount of $497 and of courier fees in the amount of $60 are granted.  As to his claim for
reimbursement of an appraisal fee, this is allowable only to the extent that he can
demonstrate to the agency that its assumption that he will occupy no more than fifty percent
of the duplex he has purchased is, in fact, incorrect.  


                                   _____________________________
                                   EDWIN B. NEILL 
                                   Board Judge