Board of Contract Appeals General Services Administration Washington, D.C. 20405 July 11, 2000 GSBCA 15309-RELO In the Matter of RICHARD J. BRENNER Richard J. Brenner, Honolulu, HI, Claimant. Michael C. Gidos, Comptroller, National Security Agency, Fort George G. Meade, MD, appearing for Department of Defense. DANIELS, Board Judge (Chairman). After Richard J. Brenner was transferred to Hawaii in April 1999, he and his wife sold their former residence in Maryland. Mr. Brenner asked his employer, the National Security Agency (NSA), to reimburse him for various expenses he incurred in selling the house. The agency paid for all the expenses but one, a $785 "administrative fee" charged by the cooperative association of which the house was a part. The employee asks us to find him entitled to this sum. Mr. Brenner maintains that "[t]he costs listed are a standard part of the sales process for homes within [the cooperative] - in the 'Intent to Sell' form, they state that the administrative fee is to 'process the transfer of contract rights.'" NSA points out that certain decisions of the Comptroller General, our predecessor in settling claims by federal civilian employees for reimbursement of relocation expenses, disallowed payment of cooperative association administrative fees. As the referenced Comptroller General decisions make clear, fees charged by cooperative associations in conjunction with the transfer of residences come in many shapes and sizes. In Ronald R. Chronister, B-177947 (June 7, 1973), some such fees were held to be reimbursable by the Government and others were not. In the former category were fees for real estate brokerage and for preparing documents required for the transfer of ownership. In the latter category were fees for supervising necessary repairs and for redecorating, and payments on a mortgage, insurance policy, utilities, and maintenance items. In William D. Landau, B-226013 (Oct. 28, 1987) (a decision whose reasoning we followed in Irwin Bernstein, GSBCA 14327-RELO, 98-1 BCA 29,596), the Comptroller General determined that a "flip tax" (a cooperative apartment owner's purchase of a right to dispose of his apartment interest on the open market rather than to the association) was not reimbursable. Mr. Brenner has provided a statement by his cooperative association listing the various costs which the association recovers by charging sellers its administrative fee. The statement shows that these costs are essentially of two kinds: supplementing the realtor's marketing efforts by compiling and distributing information about the house, and performing clerical functions necessary to the sale. Like the reimbursable expenses in Chronister, these expenses are not "nonreimbursable items," as defined by the Federal Travel Regulation (FTR), 41 CFR 302-6.2(d)(2) (1998); they are not, for example, finance, tax, or operating costs. Instead, they are like types of expenses that are reimbursable -- brokers' fees; other advertising, selling, and appraisal expenses; legal and related expenses; and incidental charges incurred in selling a residence. Id. 302-6.2(a), (b), (c), (e). Unlike the "flip tax" in Landau, the administrative fee Mr. Brenner paid was a mandatory charge by the cooperative association as a condition of making any sale, rather than an optional charge paid for the privilege of selling on the open market. The FTR provides that an expense may only be reimbursed to the extent that it is the sort of expense which is customarily incurred, and does not exceed an amount or rate which is customarily paid for such purposes, in the locality in question. 41 CFR 302-6.2. The coop's administrative fee may not be the sort of expense which is customarily incurred by all sellers in the location of Mr. Brenner's old residence. We assess whether an expense is customary or reasonable based not on all residential transactions, however, but on transactions similar to the one at issue -- here, sales of residences within cooperative associations. There is not even a suggestion that the administrative fee here was an extraordinary expense for the sales of coop units in Mr. Brenner's area, or that the amount was unusual. Thus, the fee paid does not fall afoul of the limitation. Chronister; see also Dawn S. Daugherty, GSBCA 14065- RELO, 97-2 BCA 29,050 (customariness of payment of expenses associated with Department of Veterans Affairs loans judged against other transactions involving such loans, not entire universe of transactions, in community). NSA should reimburse Mr. Brenner for the fee at issue here. _________________________ STEPHEN M. DANIELS Board Judge