Board of Contract Appeals General Services Administration Washington, D.C. 20405 ________________________ February 16, 2000 ________________________ GSBCA 15111-RELO In the Matter of CECILIA McNICOLL Cecilia McNicoll, Leadville, CO, Claimant. Rhonda M. Johnson, Office of the Chief Financial Officer, National Finance Center, Department of Agriculture, New Orleans, LA, appearing for Department of Agriculture. WILLIAMS, Board Judge. The United States Department of Agriculture (USDA) has requested our opinion on whether a claim for attorney fees and survey costs incurred in conjunction with a permanent change of station (PCS) may be paid. The agency questions whether the attorney fees in the amount of $4021 and survey costs of $3750 incurred in connection with the purchase of a residence on 37.10 acres of land are excessive. Because the record is insufficient to permit a quantification of the allowable reimbursement, we return the matter to the agency for further development of the record and reimbursement consistent with the guidelines below. The reimbursement of claimant's legal expenses is limited in two ways. First, if the land is in excess of that required for the residence site, claimant may only be reimbursed for the pro rata share of expenses covering the acreage reasonably related to the residence site. Second, legal expenses are limited to those "customarily paid by a purchaser of a residence at the new official station, to the extent they do not exceed amounts customarily charged in the locality of the residence." The survey costs are reimbursable if required to effect the transaction, if they are customarily paid by the purchaser in this area, and if the amount of the charge is customary for the area. Background Claimant, Cecilia McNicoll, an employee with USDA, was transferred from Missoula, Montana, to Leadville, Colorado, effective July 9, 1996. Claimant purchased a 37.10-acre parcel with a residence; this had been part of a larger 147-acre parcel. According to claimant, a minimum of thirty-five acres for a domestic well permit is required by Colorado Revised Statute 37-92-602. The parcel which claimant purchased was zoned as agricultural property. Claimant purchased her residence (and the surrounding land) on May 11, 1998, for a price of $100,000. She paid attorney fees of $4021 in conjunction with this transaction. The attorney fees represented 32.108 hours between August 14, 1996, and May 27, 1998, at a rate of $125 per hour, plus recorder costs. An itemized bill from the attorney includes entries regarding a "survey to resolve title obligations," preparation of two warranty deeds, two quitclaim deeds, two promissory notes, and references to "miscellaneous matters relating to closing of ranch purchase." Although claimant purchased only Parcel A, the buyer's closing statement contains an entry for recording fees for Parcel B. The warranty deed for this property indicated that there were reservations of rights of proprietors of any penetrating vein or lode to extract ore or construct rights of way, as well as quitclaim deeds, easements, and water rights. A survey of the 37.10 acres was performed in 1997 at a cost of $3750 by J. W. Land Survey Company. Claimant paid this cost in full. Discussion There are two independent bases which may limit the attorney fees claimed in this case. First, Federal Travel Regulation (FTR) 302-6.1(f)(2)(ii) provides: "The employee shall be limited to prorata reimbursement when he/she sells or purchases land in excess of that which reasonably relates to the residence site." 41 CFR 302-6.1(f)(2)(ii) (1996). In Frank A. Sterbenz, GSBCA 13662-RELO, 97-1 BCA 28,871, we applied this proration rule by determining how much land "reasonably relates to the residence site" and how much land is "in excess." As we stated in Sterbenz: "This determination should initially be made by the agency to which the claim is submitted based upon the prevailing and customary practices in the locality of the official duty station." Id. at 144,005. The Comptroller General, in 54 Comp. Gen. 597 (1975), articulated guidelines to apply in determining the proper pro rata reimbursement, including examination of zoning laws, appraisal by experts, and consideration of the location and typography of the land as ways of establishing reasonableness of the property size being sold. Accord John A. Byrd, 54 Comp. Gen. 58 (1984). The Comptroller General elaborated: Absent any zoning laws or regulations for the building of residential dwellings or if the area is generally zoned for agricultural use and the sale or purchase involves a farm dwelling with appurtenant outbuildings, the [agency's] certifying officer should take into account such factors as the use to which the land has been put in the past, its present utilization and the potential for future use. That will include consideration of crop growing, standing timber, other income producing use, fencing, irrigation, etc. In cases of unimproved land which could be subdivided and sold as lots in the future, it is suggested that the officer take into account the size of the lots in other subdivisions in the area and the requirements of the local or State Department of Health which is usually concerned with the waste disposal systems and the percolation quality of the soils. . . . . . . The valuation of the excess land for proration purposes would be the difference between the purchase or sale price less the valuation of the residence, the residence site and its appurtenant buildings. In prorating the expenses, however, the certifying officer should also take into account the practice of billing by attorneys, real estate brokers and surveyors in his locality. There are certain legal services which are provided for a flat fee such as recording of a document or drawing a deed whereas a settlement fee might be based on a percentage of the purchase/sale price of the property and might include a flat fee for a title search. 54 Comp. Gen. at 598-99; accord Michael T. Matarrese, GSBCA 14769-RELO, 99-1 BCA 30,243 ; Byrd; Daniel J. Totheroh, B-204046 (Aug. 27, 1981); Franklin J. Rindt, B-199900 (Feb. 10, 1981). The record is devoid of evidence which would support a valuation of the residence and the land reasonably related to the residential site in this case. Although the agency requested clarification of whether the property could be subdivided for additional residences or used for commercial ventures, claimant failed to provide this information. In this regard we note that claimant has the burden of proving that she is entitled to reimbursement and that the 37.10 acres or a portion thereof are reasonably related to the residential site. Although claimant cited a Colorado statute which she says requires a minimum of thirty-five acres for a well, she did not explain why a well and thirty-five acres are required for residential purposes. The FTR contemplates reimbursing employees for expenses incurred in purchasing a residence and the acreage reasonably related to the residence site -- not acreage to be used for business or other non-residential purposes. In sum, absent proof that the 37.10 acres reasonably relate to the residence site, the agency should, as the Comptroller General suggested in 54 Com. Gen. 597, "resort to the aid of experts in the real estate field. Information on such matters could be obtained locally from reliable real estate brokers or appraisers . . . who could also set a valuation on the land that goes with the residence and appurtenant buildings via-a-vis the remaining tract of land." Id. at 599. Once the agency obtains this valuation, it should prorate the appropriate reimbursable expenses accordingly. It should make reimbursement in the prorated amount unless it determines that the legal services in question would have been provided at a flat fee regardless of the proportion of the land which was associated with the residence. There is a second restriction on the amount of attorney fees claimant may recover here. A transferred employee's entitlement to reimbursement of real estate expenses incurred incident to relocation is governed by statute, 5 U.S.C. 5724a(a) (1994), as implemented by applicable provisions of the FTR. The statute cautions: "[R]eimbursement for brokerage fees on the sale of the residence and other expenses under this paragraph may not exceed those customarily charged in the locality where the residence is located." Id. 5724a(a)(4)(A). The applicable regulations permit payment of attorney fees if customarily paid by the purchaser of a residence at the new official duty station to the extent they do not exceed amounts customarily charged in the locality of the residence. 41 CFR 302-6.2(c). The Board recently applied these statutory and regulatory provisions in Stanley H. Levine, GSBCA 14909-RELO, 00-1 BCA 30,603 (1999) and denied reimbursement for attorney fees above $650, the average attorney fee for a residential sale in the Ft. Monmouth, New Jersey, locality. Id. at 2 (citing Margaret Kasper, GSBCA 14411-RELO, 99-1 BCA 30,119). In Kasper, the Board denied reimbursement of additional attorney fees above $600, the average customarily paid in the locality, incurred in connection with a sale which never transpired. 99-1 BCA at 149,014 (citing Edward C. Brandt, GSBCA 13649-RELO, 97-2 BCA 29,054 (attorney fee of $75 allowed as apparently within customary range paid in locality); Gregory A. Moore, B-249311, et al. (Feb. 4, 1993) (reimbursement limited to $200, the amount of legal fees for real estate transactions customarily paid in Iowa City, Iowa); accord David R. Petak, B-247860 (July 23, 1992) (denial of legal fees over and above the amount customarily paid in Atlanta, Georgia)). Survey Costs Applicable regulation permits the reimbursement of costs of making surveys, or preparing drawings or plats, when required for legal or financing purposes, if two conditions are met: the costs are customarily paid by the purchaser of a residence at the new duty station and the amount does not exceed that customarily charged in the locality of the residence. 41 CFR 302-6.2(c). In Dale W. Stakes, GSBCA 14613-RELO, 98-2 BCA 29,976, the Board permitted reimbursement of survey costs of $900 related to a seller subdividing his property and selling his residence at the old duty station. The Board noted that the record contained a letter from a realtor stating that surveys were not normally required in that locale, but that it was necessary for homes with acreage in the country, given that most of the land had been farm land deeded to a particular family and that thereafter the land was conveyed utilizing descriptions based upon trees or other objects. Id. at 148,294; see also Michael T. Matarrese, 99-1 BCA at 149,590 (Board upheld decision to reimburse 29% of survey costs because only 5 out of 17.02 acres were reasonably related to residence site); David G. Winter, GSBCA 14229-RELO, 98-1 BCA 29,631 (Board denied reimbursement of survey fees for an elevation certificate or a foundation survey which were required in conjunction with construction of new home but would not have been incurred in purchase of an existing home). The Comptroller General also addressed survey costs in 54 Comp. Gen. 597: We understand that a surveyor's fee might be composed of a charge for the surveyor's search of the land records and a charge for the field work covering the actual measurement of the land necessary for the legal description of the property. In such cases careful consideration should be given to the charges. Those that are related to the field work should be prorated according to the size of the property and the same ratio formula determined as above while all charges attributable to work on the land records should be paid because a searcher could spend as much time working on the land records tracing the evolution of a small parcel of land as he/she would a large tract. 54 Comp. Gen. at 599-600. In the instant case, the record is devoid of evidence explaining why the survey was necessary for the purchase, whether surveys are customarily paid for by the purchaser in the locality of the new residence, and what amount is customarily charged for a survey in that locality. We, therefore, return this matter to the agency for further development of the record. Decision The agency should obtain the additional information described above and consider this claim consistent with the guidelines above. ________________________________ MARY ELLEN COSTER WILLIAMS Board Judge