Board of Contract Appeals General Services Administration Washington, D.C. 20405 _________________ July 18, 2000 _________________ GSBCA 15206-RELO In the Matter of JOHN J. TOAL John J. Toal, Bethesda, MD, Claimant. Dana A. Brown, Assistant Director, Office of Administration, Secret Service, Washington, DC, appearing for Department of the Treasury. PARKER, Board Judge. In June 1998, Special Agent John Toal was transferred from New York City, New York, to Washington, D.C. Special Agent Toal was told by his agency, the United States Secret Service, that when he sells his house in New Jersey, he will be eligible to be reimbursed only fifty percent of the closing costs because, at the time of his transfer, Special Agent Toal owned only 50 % of the house. According to the title documents, Special Agent Toal s mother, father and brother together owned the other half of the house. Special Agent Toal has explained that, although these relatives loaned him a sum of money which he used to buy out the former co-owners of the house, Special Agent Toal placed his mother, father and brother on the title solely to protect their financial interests in the event that he should be killed or injured on the job. Special Agent Toal has filed a detailed statement addressing the requirements contained in the Federal Travel Regulation, at 41 CFR 302-6.1(c)(3)(v) (1998), for establishing a right to reimbursement based upon equitable ownership of the property. His statement provides, in part, as follows: A. The transfer is part of a permanent change of station located within the "50 States and District of Columbia." B. The Spring Lake residence was my primary residence and is the type of dwelling described in section 302-1.4(k). C. While I reserve my rights to rely on the "quit- claim deed", this properties [sic] title was in the name of the employee with one or more members of my immediate family. While 100% of the "legal title" was not solely in my name prior to the notification of transfer, according to the exception in C(3), I held 100% of the "equitable title" prior to the notification of my transfer. As explained in an earlier correspondence to you, I have been the sole owner of the property since 1996, and that my parents Arthur and Rosemary Toal and my brother Michael Toal's names were listed on the title because they were surety's [sic]. In the entire time that the property has been in my name or names of my immediate family members, I have been the only one to make payments on the property and I have [sic] will be the only one to receive proceeds from the sale of the property. D. The Spring Lake residence was my residence at the time I was first officially notified of my transfer. E. The pending sale will be completed within the two- year time limit with the statutorily provided one- year extension provided by AD Vezeris. I purchased the tract of land in 1993 and custom built the home with current USSS employees SA Brian Spellacy and SA Neil Melofchik. At the time of the purchase we were tri-owners of the land and the residence. Subsequently, both SA Spellacy and SA Melofchik became married and asked me to buy out their shares of the land and residence. I did not have the capital resources to pay both SA Spellacy and Melofchik so my parents and brothers loaned me the capital. Since that time I have made all the payments on the mortgage of the Spring Lake residence. If needed my parents and brothers will supply affidavits concerning my ownership. Special Agent Toal has, subsequent to his transfer, had his parents and his brother relinquish their legal title through execution of a quit-claim deed. He has not yet sold the house but intends to do so in the near future. Discussion The FTR, which governs allowances for expenses incurred in connection with transferred employees residence transactions, sets forth specific conditions under which such allowances are payable. Among the conditions is the following: The title to the residence or dwelling at the old or new official station . . . is in the name of the employee alone, or in the joint names of the employee and one or more members of his/her immediate family, or solely in the name of one or more members of his/her immediate family. 41 CFR 302-6.1(c). Unfortunately for Special Agent Toal, the definition of immediate family does not include non-dependent parents or non-dependent siblings. 41 CFR 302-1.4(f). If an employee or his immediate family holds only a partial interest in the residence, the Government reimburses the employee only for their pro rata share of the expenses incurred. Robert J. Voltz, GSBCA 13656-RELO, 97-2 BCA 29,037. For purposes of this allowance, the title interest must have been acquired prior to the notification of transfer. 41 CFR 302-6.1(c)(1). Generally, an employee s interest in a property is determined by reference to the title documents. 41 CFR 302- 6.1(c)(2). However, a transferred employee who lacks a legal title interest in a residence may qualify for reimbursement of real estate expenses if he or she possesses an equitable title interest in the property. The FTR sets forth the requirements for establishing that the employee possesses such an interest: (v) Other equitable title situations. The title is held both in names of : (1) the employee singularly, or the employee and one or more members of his/her immediate family jointly, or one or more members of his/her immediate family; and (2) an individual who is not an immediate family member. In addition, the conditions in paragraphs (c)(3)(v) (A) through (E) of this section apply. (A) The property is the employee's residence as described in paragraph (b) of this section. (B) The employee and/or a member(s) of the immediate family has right to use the property and to direct conveyance of the property. (C) Only the employee and/or a member(s) of the immediate family has made payments on the property. (D) The employee and/or a member(s) of the immediate family received all proceeds from the sale of the property. 41 CFR 302-6.1(c)(3)(v). Special Agent Toal has submitted a letter stating that he meets each of the requirements set forth in 41 CFR 302- 6.1(c)(3)(v) for establishing equitable title to 100 % of the property. The agency, although not objecting in principle to reimbursing Special Agent Toal, believes that he has not submitted documentation sufficient to establish that he has met the requirements of subsections (C) and (D) of 41 CFR 302- 6.1(c)(3)(v) -- that is, that only Special Agent Toal has made payments on the property, and that he will receive all proceeds from the sale of the property. Although we certainly understand the agency s reluctance to promise in advance that Special Agent Toal will receive reimbursement for 100 % of the costs incurred in selling his residence, we are not sure that there is a genuine conflict here. When Special Agent Toal sells the house (assuming that the sale is completed within the applicable time frame), the agency should reimburse him for all of the allowable costs if he provides acceptable documentation that he meets the requirements of 41 CFR 302-6.1(c)(3)(v)(A) through (D). With regard to the requirements of subsections (C) and (D), this could be in the form of canceled checks showing that he alone made the payments on the property (or alternatively, a statement from the mortgagor to that effect) and affidavits from Special Agent Toal s parents and brother stating that Special Agent Toal will receive all of the proceeds from the sale of the property. If Special Agent Toal provides these things, since the agency is satisfied with regard to subsections (A) and (B), we see no reason why he should not be deemed to have satisfied the requirements of section 41 CFR 302- 6.1(c)(3)(v). _____________________________ ROBERT W. PARKER Board Judge