Human Resources Management Division

XII. Real Estate Transactions and Unexpired Rental Leases

You may be paid for certain expenses required when you sell your home yourself at your old duty station, the purchase (including construction) of a home at your new duty station, or the settlement of an unexpired lease. You must have purchased your home at your old duty station before you were first notified by NRCS of your transfer, and at that time you must have been living in the house.

To be paid for your own real estate expenses, the title to the home at your old duty station or the new home at the new duty station, or your interest in a cooperatively-owned residence or in an unexpired lease, must be in your name, in your name with one or more members of your immediate family, or in the name of one or more members of your own immediate family. If the residence is a duplex or other type of multiple occupancy dwelling which you only partially occupy, or if you share responsibility for a leased property (such as a shared apartment arrangement), you will be paid on a pro-rata basis. You will also be limited to pro-rata payment if you sell or buy land in excess of that which reasonably relates to the operation of your home. Your administrative officer will determine what is reasonable.

The settlement dates for the sale and purchase or lease termination transactions by you may not occur later than 2 years after the date you reported for duty at your new duty station. Upon your written justification, the 2-year time limitation for completion of your sale and purchase or lease termination transactions may be considered for extension by your new administrative officer for an additional period of time up to 2 years. Your justification for a time extension must be received by your administrative officer during the initial 2-year time period. However, in no case can your request be considered or approved later than 30 calendar days after the expiration of your initial 2-year time period. Approval of this additional period of time will be based on a determination that extenuating circumstances prevented you from completing your sale and purchase or lease termination transactions during your initial time period and that your extenuating circumstances are directly related to your transfer.

These expenses do not apply if you are a new Federal appointee or an employee assigned under the Government Employees Training Act.

Example Expenses Payable by NRCS

Broker's fee and real estate commission: A customary broker's fee or real estate commission paid by you for services in selling your home will be paid.
Other advertising and selling expenses: Costs of newspaper, bulletin board, multiple-listing services, or other advertising of your residence for sale at your old duty station will be paid if you have not already paid for these services in the form of a broker's fee or real estate agent's commission. Customary costs of appraisal also may be paid.
Legal and related costs: To the extent these costs have not been claimed under other categories, the following expenses are payable if they are customarily paid by a seller of a residence at your old duty station or customarily paid by the purchaser of a residence at your new official station (1) Costs of searching title, preparing abstract, and legal fees for a title opinion or (2) where customarily furnished by the seller, the cost of a title insurance policy; costs of preparing conveyances, other instruments, and contracts; notary fees and recording fees; costs of making surveys, preparing drawings or plats when required for legal or financing purposes; and similar expenses. Costs of litigation are not payable.
Other Expenses Payable by NRCS: The expenses listed below are payable in connection with your sale and/or purchase of a home, provided they are customarily paid by a seller or by a purchaser of a residence and to the extent that they do not exceed amounts customarily paid in the locality of your home transaction(s).
- FHA or VA fee for the loan application.
- Loan origination fee.
- Customary cost for an appraisal.
- Cost of newspaper, bulletin board, multiple-listing services, and other advertising for sale of the residence at the old official station, not included in the broker's fee or real estate agent's commission.
- Cost of preparing credit reports.
- Mortgage and transfer taxes.
- State revenue stamps.
- Other fees and charges similar in nature to those listed above, unless they are specifically prohibited by FTR rules.
- Charges for prepayment of a mortgage or other security instrument in connection with the sale of your home at your old official station to the extent that the terms in these instruments provide. This type prepayment charge is also reimbursable when the mortgage or other security instrument does not specifically provide for prepayment, provided this penalty is customarily charged by the lender; but in that case, it cannot exceed 3 months' interest on the loan balance.
- Mortgage title insurance policy paid by you for the protection of the lender and is required by the lender in order for you to settle the transaction.
- Owner's title insurance policy that is inseparable from the cost of other insurance and is required for, financing or for transfer of your property.
- Expenses in connection with construction of a home that are comparable to the expenses you normally would receive if you purchased an existing residence.

Examples of Non-Payable Expenses

NRCS cannot pay for title insurance policy, "record title" insurance policy, mortgage insurance or insurance against loss or damage of your property, or any optional type insurance that is paid for by you and is only for the protection of yourself.
Property taxes.
Operating or maintenance costs.
Interest on loans, points, and mortgage discounts.
Any fees that have been inflated or are higher than normally imposed for similar services in, the locality.
No fee, cost, charge, or expense is payable if it is determined to be part of the finance charge under the, Truth in Lending Act, Title I, P.L. 90-32 1, and Regulation Z issued in accordance with P.L. 90-321by the Board of Governors of the Federal Reserve System, unless these type expenses are specifically authorized by the FTRs.
Losses due to prices or market conditions at your old or new posts of duty: Losses due to failure to sell your home at your old duty station at your asking price, or at its current appraised market value, or at its original cost, or due to your failure to buy a home at your new duty station at a price comparable to the selling price of your home at your old duty station, and any similar type losses are not payable.

Settlement of an unexpired rental lease

Expenses incurred for settling an unexpired rental lease (including month–to–month rental) on the home you occupied at your old duty station may include broker's fees for obtaining a sublease or charges for advertising an unexpired lease. These expenses are payable when:

Applicable laws or the terms of your lease provide for payment of settlement expenses,
These expense cannot be avoided by sublease or other arrangement,
You have given appropriate lease termination notice promptly after you had definite knowledge of your transfer, and
The broker's fees or advertising charges are not in excess of those customarily charged for comparable service at your old duty station.

Itemization of these expenses is required and each item must be supported by documentation showing the expense was incurred and paid by you.

Other expense for the sale and purchase of a home

Incidental charges made for required services in buying and selling a home may be payable, providing they are customarily paid by a seller at your old duty station and by a buyer at your new duty station.

The total amount for expenses that NRCS can pay for the sale of your home at your old duty station is 10 percent of the actual sale price. NRCS can pay up to 5 percent of the purchase price at your new duty station.

To reduce future unexpired rental lease expenses to NRCS, you should ask you prospective landlord to include the following paragraph in any lease you sign:

"The tenant is an employee of the United States Government. If competent orders are received terminating his duty in the area where the premises are located, tenant may terminate this lease without penalty by giving landlord thirty days notice in writing accompanied by a copy of such orders. The thirty days notice mentioned in this paragraph shall not necessarily run from the beginning of any rental period."

To be paid for your expenses incurred in settling an unexpired rental lease, you must itemize your expenses on a Travel Voucher. Each expense item you claim must be supported by documentation showing that the expense was in fact incurred and paid by you. Your voucher also must include the following statement:

"I certify that the expense incurred for settling the unexpired lease on my residence quarters at (insert location) was required in accordance with applicable laws or the term of the lease, could not have been avoided by subleasing or other arrangement, and that I did not contribute to the cost by failing to give timely notice of intent to move promptly after I was first informed that I was to be transferred to a new official station."

In order to be paid for your real estate expenses, you must submit your claim on a Travel Voucher (AD-616R). You must also submit an original and one copy of Form AD-424, Employee Application for Reimbursement of Expenses Incurred Upon Sale or Purchase (or both) of Residence Upon Change of Official Station. Each amount claimed on Form AD-424 must be supported by documentation that each expense was paid by you. Included in your required supporting documents (as appropriate) should be, copies of:

The sales agreement
The purchase agreement
Property settlement documents
Loan closing statements
Any invoices or receipts for other bills paid

Your real estate expense can be claimed in two parts:

An initial claim for your expenses for the sale of your former home or the cost to settle an unexpired rental lease.
Your expense for the purchase of a new home. You can also combine your claims.

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