What is the legal process for acquiring an aircraft?
There are many legal and tax considerations when it comes to purchasing or selling an aircraft. All airplane related transactions must comply with stringent Federal Aviation Administration (FAA) guidelines. Airplane purchase agreements must be closely reviewed by experienced aviation attorneys and clear title assured before the sale can go through. Our aviation litigation attorneys at Dunlap Bennett & Ludwig PLLC discuss the basic legal process for acquiring an aircraft below.
Preliminary Considerations for Purchasing an Aircraft
Before purchasing an aircraft, you will want to build a strong acquisition team. Purchasing an aircraft solo through an aircraft sales agent may be setting yourself up for issues because many sellers prioritize their own sale over the buyer’s needs. As a buyer, you will be well served to build an advisory board.
Start by selecting a buyer’s agent. Your agent will manage the aircraft selection and handle all communications. You will need a trusted aviation attorney who will ensure the plane has proper documentation and guide the closing. Your team must include a technical inspector who will coordinate the inspection and assess the inspection report, along with an escrow agent to manage funds. Your aviation attorney will further assist you in tax deferment strategies pre and post-sale
The Contract and Title
Purchasing an aircraft is a costly transaction. As such, you will want to ensure the purchase agreement adequately protects your legal rights. Your aviation attorney will draft a strong purchase agreement that will protect you in the event of technical issues discovered during inspections, title problems, and more. Your attorney will further search the aircraft title to uncover any liens or other defects.
Closing and Regulatory Compliance
With the purchase contract signed and inspections complete, the sale of the aircraft can move forward. Closing will involve the accumulation of all purchase steps and transfer of funds as well as title. You will need to ensure all FAA regulatory requirements are met, including registry of the aircraft and a current Airworthiness Certificate. During and after the closing, your attorney will further handle all tax matters related to the purchase of the aircraft.
The DBL team is comprised of several attorneys who not only have vast knowledge of aviation law, but are former military members and experienced licensed pilots themselves. Be sure to contact one of our aviation attorneys to help you navigate the purchase process and avoid any costly missteps and regulatory issues.
Posted in: Aviation Law