Board of Contract Appeals

                 General Services Administration

                      Washington, D.C. 20405





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                         March 11, 2003  

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                         GSBCA 16043-RELO





                 In the Matter of RICHARD GAFFIN





     Richard Gaffin, Burke, VA, Claimant.



     Charles N. Stowell, Certifying Officer, Department of State, Washington, DC,

appearing for Department of State.



PARKER, Board Judge.



                            Background



     When Richard B. Gaffin, an employee of the Department of State, was transferred

to Washington, D.C., in May 2002, he purchased a house in Burke, Virginia.  Mr. Gaffin

and his wife (the "borrower") borrowed the money from Mr. Gaffin's parents (the "lender")

to purchase the house.



     The Department of State has disallowed three expenses claimed by Mr. Gaffin in

connection with the purchase of the house.  First, the agency refused to reimburse Mr.

Gaffin for the cost of an "owner's" title insurance policy, on the basis that the policy was not

required by the lender.  The deed of trust executed by the borrower and lender required  that

"a title insurance policy will be obtained at borrower's expense."  Mr. Gavin did not

purchase a lender's policy and states that he purchased the owner's policy with his parents'

blessing so that he could deal with any title problems without having to involve his parents.



     The Department of State also disallowed the cost of a home inspection, which it

maintains was not required by the lender.  There is no evidence that such an inspection was

required by the lender.



     Finally, the agency disallowed reimbursement for a "delivery charge," which was one

of a number of fees charged by the title company.  The title company informed Mr. Gaffin 

that the fee of $22.50 was "to take the documents to the courthouse for registration."



     Mr. Gaffin has asked the Board to review the State Department's decision to disallow

the claimed costs.



                            Discussion



     The Government is authorized by statute to pay the real estate transaction expenses

of employees who transfer in the interest of the Government.  5 U.S.C.   5724a(d) (2000). 

The statutory authorization is implemented by the Federal Travel Regulation (FTR).



     The FTR provides that the cost of an owner's title insurance policy will be

reimbursed:



     provided it is a prerequisite to financing or the transfer of the property; or if

     the cost of the owner's title insurance policy is inseparable from the cost of

     other insurance which is a prerequisite[.]



41 CFR 302-11.200(f)(9) (2002).  Here, the lender required as a prerequisite to financing

that Mr. Gaffin purchase a title insurance policy but did not specify whether the policy had

to be a lender's policy or an owner's policy.  Mr. Gaffin, with the approval of the lender (his

parents), purchased an owner's policy, rather than a lender's policy, to satisfy the lender's

requirement.  Although, as the State Department points out, lenders usually require the

purchase of a lender's title insurance policy to protect their interests, Mr. Gaffin's situation

was anything but usual.  In this unique situation, in which Mr. Gaffin purchased only one

policy, and that policy satisfied the lender's requirement to purchase title insurance, we are

persuaded that the requirements of the FTR have been met and that Mr. Gaffin is entitled to

be reimbursed for the cost of the owner's title insurance policy.



     The FTR provides that property inspection fees are reimbursable "when required by

Federal, State or local law; or by the lender as a precondition to sale or purchase[.]"  41 CFR

302-11.200(f)(11).  Because there is nothing in the record to indicate that the home

inspection obtained by Mr. Gaffin was required by law or as a precondition to the purchase

of his home, he may not be reimbursed for the cost.



     The cost of recording a deed is generally borne by the purchaser and, as such, is

reimbursable.  See David G. Winter, GSBCA 14229-RELO, 98-1 BCA   29,631.  Since

taking the required documents to the courthouse obviously was necessary in order to record

them, the title delivery fee may properly be considered as part of the recording fee charged

by the title company.  Assuming the total charges for recording the deed do not exceed those

normally charged in the locality (and there is no evidence that they do), the agency should

pay them.



                             Decision



     Mr. Gaffin is entitled to be reimbursed for the cost of an owner's title insurance policy

and for the title delivery fee.  His claim for reimbursement of the cost of a home inspection

is denied.





                                   ____________________________

                                   ROBERT W. PARKER

                                   Board Judge