Board of Contract Appeals

                 General Services Administration

                      Washington, D.C. 20405









                   ____________________________



                           July 2, 2003

                   ____________________________





                         GSBCA 15999-RELO





                 In the Matter of CHRIS S. NORTH





     Chris S. North, Portland, OR, Claimant.



     Vickie Smith, Travel Supervisor, National Business Center, Bureau of Land

Management, Denver, CO, appearing for Department of the Interior.



WILLIAMS, Board Judge.



     Reimbursement for brokerage fees may not exceed those customarily charged in the

locality where the residence is located.  Claimant's request for reimbursement in the amount

of 8.34% on the sale of his home in Glendale, Arizona, must be denied where the agency

determined that a 6% commission was the usual and customary rate in that area based upon

information received from the Department of Housing and Urban Development (HUD).



                            Background



     In conjunction with his transfer to Portland, Oregon, on April 12, 2002, claimant,

Chris S. North, an employee of the Bureau of Land Management (BLM), sold his house in

Glendale, Arizona, and paid a real estate commission of 8.34%.  Before claimant agreed to

pay the commission at this rate, he contacted the BLM permanent change of station (PCS)

coordinators.  First, he contacted the Phoenix coordinator, who advised him that the

commission percentage of 8.34 was within agency guidelines and would be fully reimbursed

at that level.  Second, he called the Portland, Oregon, BLM PCS coordinator, and she

reiterated what the Phoenix coordinator had stated.  Both of these coordinators referenced

the BLM handbook for PCS moves and specifically stated that he would be reimbursed for

the real estate commission at the 8.34% rate.  Claimant's closing on the sale of his Glendale

residence occurred on May 24, 2002.



     In reviewing claimant's travel voucher, the BLM  reduced the reimbursement for the

real estate commission by $4376 based upon the advice of the HUD Phoenix field office that

the commission rate of 8.34% exceeded the usual and customary rate in the Phoenix area of

6%.



     Specifically, in response to an inquiry by BLM, a HUD representative wrote that

HUD's single family representative for marketing and outreach for the Las Vegas area, who

used to live and work in the Phoenix area, indicated that the usual and customary rate for real

estate professionals in the Phoenix area is 6% for the selling of single family structures and

between 8% and 10% for commercial properties.



     Claimant contends that he attempted to contact HUD himself and stated that it would

be difficult to establish a prevailing commission rate from HUD data because there is a range

of real estate commission agreements.  However, Mr. North did not obtain any other

evidence to support his contention that the 8.34% commission was within the reasonable and

customary range actually paid in Phoenix, Arizona, in the May 2002 time frame.  Rather, he

cited the BLM PCS handbook and stated that the 8.34% commission fell within a reasonable

and customary range "within the 10% threshold."  However, the handbook does not authorize

reimbursement of commissions in this amount, and sets 10% as the maximum for any

location.  The handbook further states:  



     Broker's fees and real estate commissions you paid on the sale of your old

     residence are reimbursable but must not exceed rates generally charged in the

     locality of your former official station.



BLM Change of Station Handbook, H1382-1 (1998).



     The Board contacted the HUD office which oversees residential sales in the Phoenix

area, as well as the Arizona Association of Realtors, and received verification that the

brokerage commission customarily paid in the Phoenix area in 2002 was 6%.

 [Foot # 1 ] 

                                 

****************** Footnote Begin **********

[Foot # 1 ]         The HUD representative provided the Board with eight final

settlement sheets from closings on residential sales in the Phoenix area in 2002.  The

commissions paid ranged from 3% to 7%.  Specifically, the commission rates were: 3% (one

sale), 3.73% (one sale), 4% (one sale), 5% (three sales), 6% (one sale), and 7% (one sale). 

The HUD representative explained the rates are typically negotiated downward, but stated

that 6% is the customary rate for this area, and the rate at which the negotiation starts.

****************** Footnote End ************



 Discussion



     Statute permits the Government to reimburse a transferred employee for expenses

incurred in the sale of a residence at the old duty station.  5 U.S.C.   5724a(d)(4) (2000);

Dan A. Berkebile, GSBCA 14845-RELO, et al., 99-2 BCA   30,492.  The Federal Travel

Regulation (FTR), at 41 CFR 302-11.200(a) (2001) (FTR 302-11.200(a)), provides that a

broker fee may not exceed the rate generally charged in the locality of the old official duty

station.  Agencies and employees may obtain assistance in determining the reasonableness

of an expense incurred in a real estate transaction, including a broker's fee, by consulting the

local real estate association or at least three different local realtors.  FTR 301-11.306(a). 

Here, the parties consulted the local office of HUD serving the area in which the expense

arose.  Where HUD has been consulted to determine what charges are customary in the

locality, the information supplied by HUD creates a rebuttable presumption as to the

prevailing commission rate.  Christopher L. Chretien, GSBCA 13704-RELO, 97-1 BCA 

 28,701 (1996).  In accordance with FTR 302-11.306(a), the Board also contacted the

Arizona Association of Realtors, whose representative reiterated that 6% was the customary

commission.  Claimant provided no evidence that commissions typically exceeded that

amount.



     In the instant case, the evidence of record demonstrates that 6% was the customary 

commission paid in the Phoenix area on the sale of single-family homes in the May 2002

time frame.  Consequently, claimant's reimbursement may not exceed this rate.



     The fact that the agency's PCS coordinators mistakenly advised claimant that he was

entitled to reimbursement at the 8.34% rate does not change this result.  Erroneous advice

does not create an entitlement where none exists.  Craig W. Sherman, GSBCA 15715-RELO,

02-2 BCA   31,959; Aman B. Kay, GSBCA 15543-RELO, 01-2 BCA   31,508; Barbara A.

Caviness, GSBCA 15390-RELO, 01-2 BCA   31,498.



                             Decision



     The claim is denied.



                                   ________________________________

                                   MARY ELLEN COSTER WILLIAMS

                                   Board Judge