Board of Contract Appeals

                 General Services Administration

                      Washington, D.C. 20405





                      _____________________



                        September 9, 2005         

                      _____________________       





                         GSBCA 16642-RELO





                 In the Matter of BEATRICE SHEARN





     Beatrice Shearn, Hampton, VA,  Claimant.



     W.B. Wagner, Director, Human Resources Division, PCS Travel

Office, Patuxent River, MD, appearing for Department of the Navy.



BORWICK, Board Judge.



     The agency, Department of the Navy, authorized claimant

Beatrice K. Shearn's permanent change of station (PCS) in the

interest of the Government from the Department of the Navy's Office

of Counsel, Patuxent River, Maryland, to Langley Air Force Base,

Virginia.  The agency granted claimant reimbursement of real estate

transaction expenses.  Claimant sold her house at her old duty

station and sought reimbursement for certain real estate

transaction expenses associated with that sale, including the

prepayment penalty of a home equity line of credit and a lien

release fee.  The agency denied reimbursement because "a review of

GSBCA and Comptroller General decisions did not reveal any

decisions dealing with this expense."  We grant the claim. 

Claimant is entitled to reimbursement of those expenses under both

the Federal Travel Regulation (FTR) and the Joint Travel

Regulations (JTR).  



     The record indicates the following.  The agency authorized

claimant's PCS on or about January 18, 2005.  According to the

settlement sheet, claimant sold her house at her old duty station

on February 15, 2005. 



     At the settlement, claimant paid off her home equity line of

credit on the residence at her old duty station.  Claimant had

secured the line of credit on November 6, 2002.  The home equity

lender assessed claimant an interest payment of $632.05 and a

separate prepayment penalty early closure fee of $1840.70, in

accordance with a provision in the line of credit note that

provided for assessment of the fee if prepayment was made within

the first five years the credit account was opened:



     If borrower closes this account and makes full prepayment

     of all sums due under the Agreement within the first five

     years after the date on which this Account is opened,

     Borrower will pay an Account Closure Fee on the amount

     prepaid in an amount equal to the greater of $900 or six

     (6) months' advance interest, calculated at the Annual

     Percentage Rate in effect on the date of Account Closure.

          



Claimant sought reimbursement of the prepayment fee, but the agency

denied payment of that expense.  



     Claimant also incurred the expense of $230 for a lien release

fee.  According to claimant, the lien release fee was assessed by

the Atlantic Coast Title Company, the firm that conducted the

settlement for the sale of the house.  Claimant says that Atlantic

Coast Title charged the fee for obtaining lien releases from both

the mortgage lender and the home equity line of credit lender.  The

fee also covered recording the releases with the county.  



     Claimant sought reimbursement from the agency of the lien

release fee.  The agency originally reimbursed claimant for half of

the fee--$115--but later advised the Board that the reimbursement

was erroneous.  The agency now seeks claimant's repayment of the

$115 reimbursement, as well as Board denial of the claim for

payment of the remainder of that fee.    

                            Discussion



     Claimant is entitled to reimbursement of the home equity line

of credit prepayment fee.  The FTR provides that a charge for

prepayment of a mortgage or other security instrument in connection

with the sale of a residence is  payable as a miscellaneous

expense, if the mortgage or other security instrument provides for

this charge.  41 CFR 302-11.200(f)(7) (2004).  The JTR are to the

same effect.  C14002-A.4.a(7).  The home equity line of credit note

in this case was undoubtedly a security instrument, i.e., a second

mortgage, and contained the prepayment penalty provision quoted

above.  The prepayment penalty was also distinct from the last

interest payment claimant made in connection with paying off the

home equity line of credit.  



     The General Accounting Office (GAO), construing an earlier

version of the FTR, allowed reimbursement of prepayment fees for

early pay-off of second mortgages, as well as for early pay-off of

first mortgages.  Donald F. Reynolds, B-194892 (Mar. 14, 1980);

Charles L. Putnam, et. al., B-183251 (May 29, 1975); see also

Orville D. Grossarth, B-216425 (Aug. 21, 1985).  The amount of fee

seems to be in accord with the prepayment provision in the home

equity line of credit, and the agency does not maintain that the

amount of the fee is unreasonable.  Claimant is entitled to be

reimbursed the $1840.70.



     We next consider whether the lien release fee is reimbursable. 

The FTR allows as reimbursable miscellaneous expenses the "cost of

preparing conveyances, other instruments and contracts, and

related . . . recording fees."  41 CFR 11.302-200(d) (2004).  The

JTR are to the same effect.  C14002-A.3.b.  The lien release fee

was the fee charged claimant for obtaining the documentation of the

lien releases from the mortgage lenders and making the necessary

recording of those lien releases.  The fee is thus properly

considered a cost of preparing a conveyance document and "other

instruments" and the cost of a "related recording fee" under the

FTR as sensibly construed.  The GAO allowed reimbursement of such

lien release fees.  Richard B. Dawson, B-189140 (Nov. 23, 1977).  



     Our decision in Richard P. Herbert, GSBCA 14575-RELO, 98-2 BCA 

 30,051, does not dictate the opposite result.  In Herbert, we

upheld the agency's refusal to reimburse an employee for his

expense, associated with his house purchase, in paying off a lien

on the property imposed by the State of Maine.  We concluded that

regulation did not authorize reimbursement of property lien

payments imposed by the state.  This case involves not the payment

of a government-imposed lien itself, but the fee to secure the

documentation for release of liens on property held by mortgage

lenders.  Therefore, claimant is entitled to be reimbursed the full

amount she paid for the lien release fee.  The agency is not

entitled to the refund it now seeks.  



     For the reasons above, the Board grants the claim.  









                                   _______________________________

                                   ANTHONY S. BORWICK

                                   Board Judge