Sal's Law
I.G..@ GON: Sal, I just found a great buy on a used aircraft and I am ready to put a down payment on it and get the paper work moving. I read your previous advice about having a full sales contract, doing a pre-purchase inspection and title search. Now comes the tricky part for me. I plan on leasing the plane back to the local flight school and I will be flying the plane when it is not being used. I want to maximize my return on the aircraft but I do have some personal assets that I want to be sure are protected from creditors should there be any incident or accident with the plane. Will an LLC protect me sufficiently from these risks?
Sal’s Law: I can give you a precise lawyer’s response to that question IG – it depends! An LLC is an appropriate ownership vehicle to protect yourself from the actions of other people using your aircraft. It is a good way to limit your exposure to the assets of the LLC, which is normally the value of the aircraft. However, when you are personally flying the aircraft the LLC will not protect you very well from claims of your own negligence while you are in command and control of the operation. For protection in that event, you need to have ample insurance and sufficient coverage for any overall incident and individual injury.
It is prudent to look at competing insurance plans. Start at one million dollars overall and $100,000.00 per seat, however more is often better and available. Next, be sure to employ hull insurance for the value of any damage to the plane. Hull insurance replaces and repairs the aircraft and works very differently than auto insurance since you are choosing the amount of the value to be protected.
As you can see such a venture should include a combination of protection strategies to ensure that you are shielding your assets adequately.
One last point; be sure the plane you are considering is something that is likely to be used by the flight school. It may be more prudent to purchase a light trainer that will be coveted by primary students instead of a P-51 Mustang which is not likely to get as much use. Then again, the P-51 sounds like more fun!
L.L. @ Email: I recently obtained my sport pilot’s license and am enjoying the fraternity greatly. I intend to eventually complete my training for a full private pilot’s license in the near future. As I plan my cross country trips I would like to use the DUAT system for weather information. However, I am reading that I must have a valid medical to access DUATs, and like many sport pilot I am using my driver’s license in lieu of a medical. Are there similar services available to sport pilots?
Sal’s Law: Congratulations on your sport license. With regard to the use of DUATs, you are certainly allowed to register and use the system under DTC or CSC DUATS. The AIM (Aeronautical Information Manual) has not yet caught up with all of the sport license rules, so you have to disregard AIM 7-1-2 which says that you can only access the information “with a current medical certificate”. Simply register for the service in advance and when you register be sure to include a note that you are a licensed sport pilot, and attach a copy of your driver’s license and your sport pilot certificate to the letter. Both of the DUATs providers will accept fax copies so you can move the process along right away and find those blue skies.
Anon: I was involved in a traffic stop for Driving While under the Influence and my license was suspended at my first court appearance but I was eventually given a plea offer to a lesser offense and my driver’s license restored. Do I still have to report the court action to the FAA?
Sal’s Law: The FARs mandate reporting anytime that there is a “motor vehicle action”. This means that in states where there are pre-disposition suspensions of driver’s licenses for DUI and DWI arrests, you must report within 60 days of the license suspension, not the case disposition. The sanction for not reporting is much more severe than the scrutiny that the arrest will be given, unless there is some negative history beyond a single incident. There are some applications that can be made to the court to maintain your license during the pendency of the case, and you may want to consider all of those.
Remember that you are required to report in two separate ways. First is the timely reporting within 60 days to the FAA Security Division (see FAR 61.15) and second you must report on your next medical application.
Understand that the FAA audits the files of the Department of Motor Vehicles in every state and checks their reports against your record. This is one of those rare times when a governmental agency is very efficient and therefore not reporting - is not an option!
Blue Skies to all!
Sal A. Lagonia Esq - is an aviation attorney representing pilots, aircraft owners FBO’s and airports with offices in New York. Send questions or requests for speaking dates to 914-245-7500 or Sal@LagoniaLaw.com.