FSD 16.13

The department had requested an interpretation of the Relocation Policy regarding payment of legal costs for a second mortgage. The Administrative Committee considered and agreed with the report of the Government Travel Committee that in general it is the intent of the Relocation Policy to reimburse emptoyees for legal fees incurred to establish clear title to the property.

Article 4.5.2 noted that, in addition to the legal fees charged, there may be expenses of a legal nature associated with a sale of a principal residence or the purchase of a replacement residence. Such expenses, when necessary to acquire or provide clear title to the property, are reimbursable upon presentation of evidence of the payment. Included in the examples given is the expense incurred to dispose of and/or acquire a first mortgage. This provision was incorporated into the policy on January 1, 1979. Article 4.6.4 further states that expenses related to other financial arrangements resulting from the disposal and acquisition of principal residences, including mortgage finder's fees, are not essential to establishing clear title to the property and, as a result, are not reimbursable. Within the intent of the Relocation Policy, as highlighted in the two articles noted above, costs associated with second mortgages such as appraisals and processing fees are not reimbursable, as they relate more specifically to individual financial arrangements rather than verification of clear title.