Case # 2012-032

Real Estate and Legal Fees, Real Estate Commission paid on the Purchase of a Replacement Residence, Relocation expenses

Case Summary

F&R Date: 2012–05–30

The grievor was relocated as a result of a posting and used the services of a real estate agent for the purchase of a new residence which resulted in the disbursement of a real estate commission (REC). The grievor submitted a request for reimbursement of the REC, but was denied on the basis that REC is only payable on the sale of a principal residence.

The grievor contended there was no clear direction in the Canadian Forces Integrated Relocation Program (CF IRP) concerning REC on the purchase of a house. The grievor indicated he provided a buyers' agency contract (BAC) to Brookfield Global Relocation Services (BGRS) representative well in advance of the closing on his house and at no time did the representative advise him that the REC would not be reimbursed. As redress, he requested reimbursement of the REC.

The initial authority (IA) denied redress pointing out that while the section of the CF IRP dealing with the sale of a principal residence includes the reimbursement of REC as part of its benefits, the section concerning the purchase of a residence does not; since CF IRP policy is "all inclusive", the IA determined that reimbursement of REC is not a reimbursable benefit when purchasing a residence.

The Board agreed with the IA. While the Board could appreciate the grievor's concern and arguments, the fact that he entered into a BAC and incurred REC fees was a personal choice, one that is not binding on the Canadian Forces (CF) and for which the Treasury Board has not approved reimbursement. The Board also noted that the grievor had signed a BGRS Consultation Checklist prior to his relocation, as well as prior to signing a BAC with a realtor. By signing this checklist, the Board pointed out that the grievor acknowledged that he had been "counseled on all items checked above", which included the checked item "Realtor/Broker Services and Fees". The Board concluded that although the file material was silent on what specifically was discussed, it did not support the conclusion that the grievor had been ill-advised.

In a previous similar case, while it could not recommend that redress be granted, the Board found that greater clarity should be provided to CF members by amending CF IRP policy and its supporting documents; in that case, the Board recommended the re-insertion of a note into the CF IRP policy as well as its inclusion in the "It's your Move" manual. The Chief of the Defence Staff (CDS) agreed with the Board and, in his decision of 15 September 2010, directed the Director General Compensation and Benefits to ensure that the following note be inserted in future CF IRP manuals: "Real Estate commission paid by a contractor or the member to a real estate agent is not reimbursable when purchasing a replacement residence".

The 2010, 2011, and 2012 CF IRP policies were reviewed to verify if the CDS order had been implemented; the Board found that none of the policies, nor any of the clarification bulletins since the CDS decision letter, contains the directed Note.

The Board recommended the CDS deny the grievance.

Given that no action had been taken on the CDS direction, the Board reiterated its previous recommendation of a systemic nature that the Note mentioned above be inserted into future CF IRP policies.

CDS Decision Summary

CDS Decision Date: 2012–12–20

The CDS agreed with the Board's findings and recommendation that the grievance be denied. The CDS also agreed with the Board's systemic recommendation that the identified publications must clearly indicate that real estate commission paid by a contractor or the member to a real estate agent is not reimbursable when purchasing a replacement residence. The CDS has been assured by DGCB that the new policy will include a similar statement.