Lease an aircraft for personal use.

Shepherd

Shepherd

Final Approach
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Shepherd
OK. I thought I had been involved in just about everything relating to aviation, but this one is new to me.
A pilot I have known for a couple of years has contacted me and wants to know if I would be interested in leasing his Cub from him.
He doesn't want to sell it, but he doesn't fly it as often as he should,he doesn't want to do a leaseback with an FBO (and student pilot wear and tear) and he knows me and my abilities, etc. so I get to fly cheap and he makes a little money to defray the cost of keeping his airplane.
Anyone been involved with something like this?
AOPA doesn't seem to have a sample lease form for this type of arrangement. (non-business). Anyone know of any resources?
Thanks in advance.

It's a really nice airplane.
 
I did that when I took my 182RG off leaseback. My old CFI and a pilot from the club wanted to rent it. The CFI met the open pilot warranty and I added the other pilot to my policy. Worked out pretty good.
 
Matt Guthmiller (young guy who was previously the youngest to fly around the world) leases his Bonanza. I don't see why not.
 
Is this any different from a non-equity partnership? If so, how so?
 
Definitely do-able. It's ultimately an extended rental, although it tends to be longer than the typical FBO rental agreement.
 
I had a similar deal with a local FAA FSDO safety inspector. All the FSDO guys would use it to keep tailwheel current. It was a great deal for me. Helped offset the costs and I knew it wasn't being pounded by students.

You can bet that ever squawk got addressed pronto
 
Just make sure you are covered under his insurance or carry your own renters insurance if not.
 
To me it seems silly to go through that whole process of creating a lease agreement and what not. Just have him name you on his insurance and then flip him some coin when you fly it. Keep things easy!
 
I'm in my second non-equity partnership, which is effectively leasing. The current one had limited documentation. The prior had a doc like a FBO rental "club".

I think it's a great arrangement if it works well for both of you.
 
I dry lease my plane to @Tantalum to make sure it flies enough since my usage has come down a bit (formerly ~300 hrs a year, probably ~100-150 now). I don't do it to make a profit but it keeps the airplane flying frequently and spreads some of the fixed costs a bit. I would not do it with anyone I don't 100% trust to take care of my plane as I do.

It can be a win-win as long as you pick the right partner.
 
Half Fast said:
Don’t you own a Cub of your own? If I remember that right, why lease another one?
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I haven't owned an aircraft in years.
I had a lot of friends who had aircraft of every size, shape and category. Very few of them had the time to fly them, so they all gave me keys and I flew anything I wanted, whenever I wanted.
The problem with getting old is you outlive your friends.
And their airplanes.
I was all set to buy a plane last spring, when my 101 year old mother-in-law went broke. Now I's spending $6K+++ a month to support her.
And she shows every sign that she will outlive me. sigh............
 
Shepherd said:
I haven't owned an aircraft in years.
I had a lot of friends who had aircraft of every size, shape and category. Very few of them had the time to fly them, so they all gave me keys and I flew anything I wanted, whenever I wanted.
The problem with getting old is you outlive your friends.
And their airplanes.
I was all set to buy a plane last spring, when my 101 year old mother-in-law went broke. Now I's spending $6K+++ a month to support her.
And she shows every sign that she will outlive me. sigh............
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Try taking her flying...
:devil:
 
Shepherd said:
Anyone been involved with something like this?
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as noted above, I was lucky enough to work out a lease agreement on a kick ass airplane with @RudyP a fastidious owner who takes great care of the aircraft and keeps it in proper ship-shape condition. If you have the opportunity to get set up in a lease agreement like that then I would go for it in a heartbeat, it has been a real lifesaver for me giving me the opportunity to fly something I otherwise wouldn't have the opportunity to fly. you also do not have to deal with the stuff you would deal with in a typical club like the usual politics, scheduling, and maintenance issues that you would get..

RudyP said:
I would not do it with anyone I don't 100% trust to take care of my plane as I do.
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Thanks! The feeling is mutual
 
Ryanb said:
To me it seems silly to go through that whole process of creating a lease agreement and what not. Just have him name you on his insurance and then flip him some coin when you fly it. Keep things easy!
Click to expand...
KISS with a casual non-agreement will work a lot of the time for casual use and rental. Most of the time, actually. But those times it doesn't... :eek:
 
Shepherd said:
I was all set to buy a plane last spring, when my 101 year old mother-in-law went broke. Now I's spending $6K+++ a month to support her.
And she shows every sign that she will outlive me. sigh............
Click to expand...

Well, she did better than most. Most don't make it to 101 and most don't plan for enough retirement money to last anywhere near that long either.

Half Fast said:
Try taking her flying...
:devil:
Click to expand...

Sneaky, I like it. I was going to suggest a "fall" on the stairs.

;)
 
midlifeflyer said:
KISS with a casual non-agreement will work a lot of the time for casual use and rental. Most of the time, actually. But those times it doesn't... :eek:
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Like it throws a rod while you're flying it. Or a tire blows out. Or there's some hours-based inspection needed. Does the lease payment include regular maintenance, or is that on the renter? None of these will be problems if you work it out in advance, but could be big problems if you don't.
 
Lindberg said:
Like it throws a rod while you're flying it. Or a tire blows out. Or there's some hours-based inspection needed. Does the lease payment include regular maintenance, or is that on the renter? None of these will be problems if you work it out in advance, but could be big problems if you don't.
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KISS was my philosophy too. One dry rental rate that covers everything, no separate payments for anything. Should something happen, if it is directly related to something Tantalum does as PIC (e.g., he taxis the wingtip into a hangar or he majorly messes up the engine parameters and melts the cylinder heads) it is on him. If it is a random MX event, it's on me. Should we not agree on who is directly responsible, a third part mechanic will be hired to render an opinion. Neither of us remotely think something like that will happen. Tantalum has already offered to contribute $$$ to random maintenance/minor upgrades that he has no business paying and I have politely refused. It helps that both of us are the type of person who tends to reach for the check on a group bar tab.

Edit to add: we do have a written agreement with all kinds of (overkill) legal terms and clauses. I borrowed a friend's as a template rather than write my own so it is a bit more detailed than necessary but probably beats the alternative.
 
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Lindberg said:
Like it throws a rod while you're flying it. Or a tire blows out. Or there's some hours-based inspection needed. Does the lease payment include regular maintenance, or is that on the renter? None of these will be problems if you work it out in advance, but could be big problems if you don't.
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Not aviation related, but the nastiest business case I ever handled involved two guys who were BFFs since childhood. Made a deal with each other but never wrote it down, so each had a very different view (honestly and in good faith) on what the agreement was when it came time to pay up. Each figured his best friend was trying to screw him. It was like a divorce. Destroyed the friendship (dunno if they ever repaired it).

A paper napkin and a marker would have done wonders to keep the peace.
 
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All agreements are a matter of mutual expectations. All problems with agreements come from private expectations not being met. If two people get along well enough to have purely mutual expectations and to work through any differences in expectations that arise, then they can get by on a handshake.

For the rest of us, having something in writing helps to make all private expectations mutual by spelling out a mutual expectation about how to deal with them when they come up. Written agreements have basically one purpose, and one purpose only: To document the parties' mutual expectations for dealing with abnormal situations. They're basically nothing but abnormal procedures checklists, which only come out when something goes wrong. The length of a written agreement is a function of how much you want to argue up-front to reduce the chance of an argument later.

I like written agreements, even very short ones. "Lessee will pay a dry rate of X dollars per tachometer hour and keep the fuel tank full. If Lessee is in the airplane or ground handling it and someone other than Owner is PIC, Lessee is responsible for the cost of fixing anything that breaks."

Written agreements also help with something that you may not expect, but should: Insurance companies with no mutual expectations with either of you or each other will come in with their own expectations and litigate. It's a Cub, not a Gulfstream, but if things go really sideways there will still be an insurance fight between your policy and his. If you and the other guy at least have mutual expectations about your roles in that insurance fight, you can prevent it from turning into a personal fight.
 
Here is a question that the owner might want to look into: If leasing the airplane, does he need commercial insurance?
 
If two people are reasonable gentleman then I think the legalese can be kept to a minimum. You need more than a handshake, so having something in writing helps.. but it can honestly be *almost* as simple "we will be reasonable adults and not ass holes, who ever is in the possession of the plane when it breaks is generally going to be culpable party".. or to some degree. An engine failure not caused by the current pilot's actions may be up for debate (was it bad fuel at the FBO, did a mechanic neglect to properly wire a mag?).. but in general most cases will be pretty obvious.. and in the case of an engine failure not caused by the leasing PIC (but successful glide and plane is otherwise okay) I think the appropriate thing would be to still have that leasing PIC at least fit some of the cost (or at the minimum offer).. since, ultimately, the issue did happen on your watch. That's not unreasonable, if you owned the plane alone you'd be on the hook for that, so it's only fair to offer some kick in for it.. even if the fault was bad fuel at the FBO

And in my experience so far all the damage (knock on wood) has been relegated to cup holders, which have not been my fault :rofl:

Unfortunately our society has fostered an environment where every single contingency has been thought of by lawyers, and it is all written down in reams of paper.. which almost dehumanizes the whole thing so people's default reactions (even when they're obviously at fault) is to find a way out by some written loophole, which only makes it that much worse for people down the line

Anyway, I digress..
 
iamtheari said:
All agreements are a matter of mutual expectations. All problems with agreements come from private expectations not being met. If two people get along well enough to have purely mutual expectations and to work through any differences in expectations that arise, then they can get by on a handshake.
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Here's what I learned from the situation I described a couple of posts ago, and from a few ;) others: It's perfectly ok for friends to do business. So long as they do business - IOW, treat it like a business relationship.

Tantalum said:
Unfortunately our society has fostered an environment where every single contingency has been thought of by lawyers, and it is all written down in reams of paper.. which almost dehumanizes the whole thing so people's default reactions (even when they're obviously at fault) is to find a way out by some written loophole, which only makes it that much worse for people down the line
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I agree lawyer-produced documents of this type tend to be longer than necessary. Lots of it, though, are boilerplate; things which are obvious to real people. I'm as bad as anyone else (almost as bad; I dislike legalese and try to write mine in English - I have a non-aviation syory about that ). Part of the problem is, of course, that all those contingencies are based on things which actually happened and the dispute that ended up in years of litigation was often a contingency which was not covered.
 
Tantalum said:
true, but one which typically reasonable people could have resolved without years of litigation.. but I get it
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I agree. The problem is what happens to "typically reasonable people" when they get into an argument.

Story: "Typically reasonable" businessman (businessmen tend to be very practical and reasonable when it comes to litigation - none of them like it) who got into one of those silly right-of-way ****ing contests with another "typically reasonable" person over who and how to access a lake on vacation property. It ended up in litigation. The two lawyers hashed out a settlement the lawyers thought was a reasonable compromise, but the clients on both sides rejected it. Couple of tens of thousands later apiece we had our court-ordered resolution. Which was almost identical to the settlement the lawyers previously tried to sell - and, no, the judge did not know the content of our negotiations.
 
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