Board of Contract Appeals

                 General Services Administration

                      Washington, D.C. 20405







                                                 



                           May 11, 2005

                                                 





                         GSBCA 16556-RELO





                  In the Matter of DAVID C. LITT





     David C. Litt, Durham, NC, Claimant.



     W. David Malone, Certifying Officer, Travel Service Center, Department of State,

Washington, DC, appearing for Department of State.



DANIELS, Board Judge (Chairman).



     David C. Litt and his wife purchased a home in Durham, North Carolina, subsequent

to his transfer to that city in September 2002 by the Department of State.  The department

reimbursed Mr. Litt for most of the expenses he incurred in buying the house.  It denied some

of the claimed expenses, of which Mr. Litt asks the Board to review three.



     The first is labeled "appraisal fee," but actually is a fee paid by the Litts to a building

inspection service firm for a structural and mechanical inspection of the premises.  Under the

Federal Travel Regulation, which the department cites as the authority governing

reimbursability of the employee's real estate transaction expenses, an appraisal fee is

reimbursable, but a property inspection fee paid by a purchaser for his own purposes is not. 

41 CFR 302-11.200(b), (f)(11) (2002).  The label affixed by the parties notwithstanding, a

structural and mechanical inspection is not an appraisal, but rather, a property inspection. 

The record contains no indication that the inspection was performed at the behest of anyone

other than the purchasers.  The fee is therefore not reimbursable.



     The second expense at issue is an inspection fee paid to an entity which made a

mortgage loan to Mr. and Mrs. Litt.  A property inspection fee is 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).  This inspection fee was required by the lender as a

precondition to purchase of the house and is therefore reimbursable.



     The third expense is a premium paid for title insurance.  The cost of a title insurance

policy is reimbursable when the policy is purchased "for the protection of, and required by,

the lender."  41 CFR 302-11.200(f)(8).  It is not reimbursable if it is for the benefit of the

purchaser, unless it is "inseparable from the cost of other insurance which is a prerequisite

[to financing]."  Id. 302-11.200(f)(9).  Mr. Litt has now provided proof that most of the

premium he paid was for a policy required by the lender and that a smaller portion of the

premium was for the benefit of him and his wife as new owners of the property.  The

department has properly agreed to reimburse Mr. Litt for the lender's portion of the premium.











                                   _________________________ 

                                   STEPHEN M. DANIELS

                                   Board Judge