Aopa Lease Agreement

The terms “lease” and “leaseback” (sometimes referred to as “sale-leaseback”) can be confusing, as they are often misused and/or interchangeable, but the two actually mean very different things. A “lease agreement” is an agreement where the owner of another person or company authorizes the use of that property for a specified period of time for a certain amount of money. The owner – called the “lessor” – retains ownership of the property and the person who pays the owner for the use of the property is called a “tenant”. A leaseback is an agreement where the owner sells the property directly to another and then immediately leases it to the buyer for a certain amount of time and a certain amount of money. For example, a flying club that owns a Cessna 172 could sell it to John Doe, and John Doe could immediately turn around and enter into a leaseback contract with the same flying club. The club would reimburse John Doe`s 172 and pay him a sum of money in exchange for the use of the plane. This is a real leaseback agreement. A situation in which an owner simply rents his plane to a club is called “leasing”. The regulations don`t say this explicitly, but the FAA said the aircraft`s owner could not take precedence over operator 135`s customers. The lease must therefore be carefully drawn up in order to follow the language of FAR 135.25 (b), under penalty of an offence. The lease must also be for a period of at least six months, in accordance with the rules. Carefully pass Part 135 transactions and talk to knowledgeable people before signing leases.

Please contact our Flying Clubs employees at [email protected] or call 1.800.USA. AOPA. Establishing a part 135 lease agreement requires specific knowledge and if Operator 135 does not have a lease agreement already entered into by the FAA, it would be highly advisable to find an experienced attorney to design the lease. These arrangements contain many traps for the unwary. Even if the certificate holder`s FAA Principal Operations Inspector (POI) has reviewed and approved the lease, another POI may interpret the lease differently and cause problems for both the owner and the certificate holder. Outright leasing can be done legally, but certain terms such as “leasing” and “dry leasing” need to be studied. In general aviation, many people refer to an aircraft leased with fuel included in the leasing rate as a “wet lease”. If the pilot has to pay for fuel in addition to the hourly leasing rate, this is usually referred to as a “Dry Lease”. Many aviation clubs and flight schools call their hourly rental fee for a plane carrying fuel as a “wet price.” FAR 135.25 defines general aircraft requirements for 135 operators. If the leased aircraft is proposed as the only aircraft used by the operator, carefully consider the “exclusive use” requirements of FAR 135.25. The rules provide that any Part 135 operator must have the “exclusive use” of at least one aircraft for the type of operation approved by the operator. If you are considering any of these agreements, pay close attention to the language of the rental documents to ensure that they use the correct terminology.

Using both terms incorrectly would probably not cause major legal problems, but if you`re dealing with an asset as expensive as an airplane, it`s worth being correct…