BNUMBER:  B-265606
DATE:  July 2, 1996
TITLE:  Frances M. Rosarius

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Matter of:Frances M. Rosarius

File:     B-265606

Date:July 2, 1996

DIGEST

A transferred employee, who also was a licensed real estate agent 
employed by a real estate firm, contracted with the firm to have it 
list and sell her residence at the old duty station and to pay the 
firm a 6 percent real estate commission.  In addition, the firm, by 
separate agreement, arranged to have the employee handle the residence 
sale on its behalf.  Following the sale of the residence, the employee 
and her husband were charged and paid the 6 percent commission to the 
firm, which in turn compensated the employee for her sales services.  
Her claim for reimbursement for the commission paid was reduced by the 
amount of the fee paid her by the firm.  She appeals that ruling.  
Under applicable laws of the jurisdiction involved, the legal 
relationship between the parties regarding the commission paid for the 
sale of the residence, on one hand, and the relationship between the 
employee and the firm regarding payment of compensation for her 
performing the sales services, are separately enforceable.  Therefore, 
since the employee incurred a legally enforceable debt, the full 6 
percent real estate commission may be reimbursed to her.

DECISION

This decision responds to correspondence from Ms. Frances M. Rosarius, 
who is appealing Claims Settlement Z-2869355, Nov. 7, 1994.  That 
settlement disallowed that part of the brokers' commission paid the 
real estate firm that was equal to the amount she received from the 
firm as the sales agent for selling her own residence incident to a 
permanent change of station in May 1994.  We conclude that the full 
real estate brokers' commission paid the real estate firm may be 
reimbursed, for the following reasons.

BACKGROUND

Ms. Rosarius, an employee of the Department of the Army stationed at 
Tooele Army Depot, Utah, was transferred to the Corpus Christi Army 
Depot, Texas, by travel orders dated April 18, 1994.  She reported for 
duty at her new station on May 31, 1994.  In addition to her federal 
employment, Ms. Rosarius also held a license as a real estate agent 
and was employed by Wardley Better Homes and Gardens (Wardley), a real 
estate firm in the Tooele Depot area.  The file shows that she and her 
spouse contracted with Wardley to sell their residence, with Ms. 
Rosarius to act as the selling agent for Wardley.  

The employee and her husband sold their residence and went to 
settlement on May 19, 1994.  As the sellers, they were charged and 
paid Wardley a 6 percent real estate commission ($4,920) on the sale.  
The Army disallowed reimbursement of that amount due to the 
uncertainty regarding Ms. Rosarius's status as the employee/seller of 
the residence and as agent on the sale.  On appeal here, we ruled in 
settlement Z-2869355, Nov. 7, 1994, that she was entitled to be 
reimbursed for that part of the commission paid Wardley that was in 
excess of the fee that she received from Wardley as the selling agent.  
Ms. Rosarius appeals that settlement and seeks reimbursement for the 
full commission she and her husband paid to Wardley.

OPINION

The authority for the reimbursement of real estate expenses is 
contained in 5 U.S.C.  sec.  5724a(a)(4)(A) (1996), and Part 302-6 of the 
Federal Travel Regulation (FTR).[1]  Section 302-6.2(a) of the FTR 
provides that the brokers' fee or real estate commission paid by an 
employee for services in selling his/her residence at the old duty 
station is reimbursable, but not in excess of rates generally charged 
in the locality of the old official station.[2]   

In interpreting the statute and the regulation, we have held that a 
brokers' commission may be reimbursed only where the employee has 
incurred a legally enforceable obligation to do so.[3]  We look to 
state law to determine whether the payment obligation claimed by the 
employee is legally enforceable.[4]

Under Utah law, an individual who is employed as a sales agent, or 
engaged as an independent contractor, to perform any real estate 
services for another must be 
licensed[5] and must be affiliated with a principal real estate 
broker,[6] who also must be licensed.[7]  It is also unlawful for a 
sales agent to accept a fee for services performed from any person 
other than the principal broker with whom he/she is affiliated.[8]  
Further, only principal brokers, not sales agents, may bring an action 
to recover a commission, fee, or compensation for real estate services 
performed by representatives of the firm for another.[9]

Two separate legal relationships are involved in this real estate 
transaction, each with different obligations and benefits.  The legal 
relationship between Mr. and Mrs. Rosarius, as residence owners, and 
Wardley, as the principal broker for the sale of the residence, is 
independent from the legal relationship between Wardley, as principal 
broker, and Ms. Rosarius, as its sales agent.  Under the listing 
agreement, the sellers agreed to pay Wardley a real estate commission 
if it was sold during the period of the listing.  Since the residence 
was sold during that listing period, they became legally obligated to 
pay the real estate commission to Wardley.  Under a separate 
agreement, Wardley agreed to pay Ms. Rosarius a fee as its sales agent 
for her services in selling the residence.    

We have held that the fact that an employee's spouse, who was a 
licensed real estate agent and actually performed services for the 
real estate firm in selling the residence, received a fee from her 
employing real estate firm for those services, would not preclude 
reimbursement for the full commission expenses required to be paid by 
the employee to the real estate firm.[10]  We also have permitted 
reimbursement of the brokers' commission paid to the mother of the 
employee for her services in selling the employee's residence, because 
she was a licensed real estate broker.[11]

In the present situation, Mr. and Mrs. Rosarius were under a legal 
obligation to pay Wardley a 6 percent commission for the sale of their 
residence.  The fact that the employee also was a licensed sales 
representative for Wardley and performed the required services through 
Wardley as a licensed real estate agent does not preclude 
reimbursement for the full commission paid to Wardley for the sale of 
their residence.  Therefore, Mr. and Mrs. Rosarius may be reimbursed 
that additional amount. 

Robert P. Murphy
General Counsel      

1. 41 C.F.R. Part 302-6 (1995).

2. See also paragraph C14002 of Volume 2, Joint Travel Regulations.

3. Paul A. Pradia, B-219501, Jan. 13, 1986, and decisions cited.  See 
also A.F. Madayag,  B-217514, Nov. 25, 1985.

4. Patricia A. Wales, 61 Comp. Gen. 96 (1981).

5. Utah Code Ann.  sec.  61-2-4 (1993).

6. Utah Code Ann.  sec.  61-2-8 (1993).

7. Utah Code Ann.  sec.  61-2-1 (1993).

8. Utah Code Ann.  sec.  61-2-10 (1993).

9. Utah Code Ann.  sec.  61-2-18 (1993).

10. Hans C. Pedersen, B-239886, Nov. 9, 1990, citing to Robert J. 
Mihalovic, B-193201, June 19, 1979.

11. W. Jerry Goudelocke, B-189375, Oct. 12, 1977.