# 2012-136 Pay and Benefits, Home Equity Assistance Program (HEAP), Integrated Relocation Program (CF IRP)

Case Summary

F&R Date: 2012–12–27

In July 2007, the grievor purchased a residence upon posting. The same month, she obtained a proposal from a separate contractor to finish the basement of her new residence and eventually proceeded with the renovation. The grievor’s financial institution agreed to include the cost associated with the completion of the basement to her mortgage.

In May 2010, before being posted, the grievor requested that the Director Compensation and Benefits Administration (DCBA) change the original purchase price of the residence to reflect the amount of the mortgage. The DCBA Relocation Adjudication Section (RAS) denied her request explaining that she had purchased a new home construction but had contracted a third party homebuilder to finish the basement. The RAS noted that the grievor would be entitled to capital improvements as part of the Canadian Forces Integrated Relocation Program (CF IRP) 2009, but was of the view that the original purchase price and the mortgage amount are separate issues. RAS upheld the original purchase price as well as the assessed value for the purposes of the CF IRP 2009. The grievor was reimbursed for capital improvements on settlement of her CF IRP 2009 claim.

The grievor submitted a grievance objecting to the RAS decision indicating that the residence was a model home with an unfinished basement and that in normal circumstances she would not have purchased a house without a completed basement or even built a new house without including a finished basement. She explained that this was the reason why, shortly after the purchase, a contractor was hired to finish the basement and that the financial institution agreed to add the cost to the mortgage. The grievor claimed that she made an “uninformed decision” in contracting a third party to finish the basement, not knowing that it could have a potential impact on benefits when selling her residence. The grievor requested that the original purchase price be amended to reflect the original mortgaged amount, making her eligible for the Home Equity Assistance (HEA) benefit in light of the price at which she was able to sell her residence.

The Board found that the original purchase price included the cost of any feature in respect of which contractual arrangements were in place before the closing date, and which afterwards would be considered an inseparable part of the real estate. The Board concluded that the original purchase price and the mortgaged amount are plainly and manifestly two separate matters and that, in the grievor’s case, if the improvements would have been contracted prior to the closing date and included in the Agreement of Purchase and Sale, the cost for completing the basement would have been considered as part of the original purchase price. The Board found that the RAS decision was reasonable. As a result, the grievor is not eligible for HEA benefits.

The Board recommended that the Chief of the Defence Staff deny the grievance.

CDS Decision Summary

CDS Decision Date: 2013–05–10

The CDS agreed with the Board's findings and recommendation that the grievance be denied.