Companies are relocating more and more employees. Depending on the employees’ level and how essential they are, companies will pick up part or all of the moving cost, which typically for a two- or three-person family moving out of a two-bedroom house across country could total between $45,000 and $75,000.
Ambitious executives readily accept the need to move (though no longer unquestioningly). If they are considered essential, the company will offer them a Cadillac relocation package. This covers every aspect of the move. They’ll choose a real estate agent to represent them as sellers at one end and as buyers at the other end. Neither agent’s fees would be paid by the employee.
Movers’ agents will turn up to assess the work and time involved in packing, loading and moving. In a top-of-the-line relo, the homeowner does nothing except collect personal valuables and identify breakables, and inform the utilities and the post office. The movers do the rest, which includes wrapping and packing, and loading everything that is not fixed to the foundations. If you have two vehicles and drive one to the new location, they’ll load the second one.
You’ll be flown to the new location to scout out new residences with your newly-acquired real estate agent. Your flight out and back, as well as hotel and food will be expensed. With your house sold, all real estate expenses, title, insurance, legal fees will be expensed. Your final overnight stay in a hotel before leaving your home city will be covered, as will your final flight or drive to your destination city.
On arrival, you will be put up in a rental apartment for the period it takes before moving into the new house. The second real estate agent, all the closing costs, will be borne by your employer, including the cost of warehousing your house contents until they can be trucked to your new house.
Once you’ve bought your new house, your worldly goods will be delivered and unloaded room by room, with any damage immediately settled or repaired.
If all this sounds too good to be true, it isn’t. It happens. Companies find it is still often less costly to move an existing executive than to hire a local person they don’t know, may have
to train and for whom they may have to pay a hefty fee to a search firm. But there is a caveat for the person being relocated. The advice is to look very carefully over a contract of relocation.
Because it may contain a particular phrase most people innocently ignore. Beware the words “repayment of entire relocation fee for two years from date of final expense to employee.”
What this is saying in English is that while most of the expenses related to the relocation are settled within days or weeks, some can take months to come through. Movers’ damage or the house inspection might not be settled for months. For the employee who remains contented in his or her new posting, this may be entirely irrelevant. But suppose things don’t work out. Suppose, for example, that the new employee finds he is disliked in the new office or that her mother wants her back in the old city, or that a fantastic new job is available, even in Cleveland. Under typical conditions the employee would serve out his or her two years and then quit without fear of having to pay back the relocation fee. But if there are still three or four months left in connection with several late expense payments, he or she might not even realize they need to wait, or risk being forced to repay the relo cost.
So, to avoid the trap of relo repayment, follow these simple steps. At the time of the relo negotiation, request a document setting out all the conditions (treat this document as a thing of great value and keep it safe). Usually, relo agreements follow a two-year period (after which the employee is released from repayment conditions). Try to negotiate a lesser term, such as one year – thus, less time for worry. Also, since every major relo involves an outside company that handles the entire moving process, make sure you receive all copies of relo documents due you, keep them safe and keep safe all business cards of contact people assigned to your move. Finally, bear in mind that the later in the move you incur an expense, the later it will be paid and the farther back will be pushed the final date of settlement and the deadline for the repayment period.
