Once you have made your decision to enter into a condominium agreement, your next important step is to clarify the obligations of each of the co-owners. We strongly recommend that you take the time to make a list of “ground rules” for each co-owner. The next step is to present this list to a lawyer who can draft a co-ownership agreement that binds all the co-owners. The extra time and relatively little extra effort involved will far outweigh the risk of disagreements and misunderstandings that will occur on the road. The concept of co-ownership is very simple. There are no more than two or more persons who share responsibility for owning an aircraft. Of course, if you spread the cost of owning the aircraft among several owners, your costs will decrease. The apparent simplicity of this agreement is what attracts a number of aircraft owners to a condominium agreement. To help you and your lawyer enter into a condominium agreement, here is a checklist of some important issues you should include in your agreement. Co-ownership is defined in section 91.501(c)(1) of 14 CFR of the Federal Aviation Regulations (FAR) as “an agreement in which one of the registered co-owners of an aircraft employs and provides the flight crew of that aircraft and each of the registered co-owners pays a portion of the fees set out in the agreement.” Under this contract, a registered owner may provide the flight crew and the other registered co-owner may pay a portion of the fixed ownership costs set out in the agreement. Each co-owner is responsible for the individual coverage of its direct operating costs. All co-owners must be named on the aircraft registration certificate.
In most states, it is assumed that a co-ownership agreement is a colocation and is considered a colocation only if this provision is expressly created. Even the use of the term roommate or roommate is not a clear term in most states to create a joint tenancy, as people often use these terms in a non-technical sense to refer to a joint tenancy. Therefore, if for any reason you want to create a roommate, in addition to using the terms roommate or roommate, you must explicitly refer to the right to survivors. Again, this checklist is designed as a guide for creating your condominium agreement. Keep in mind that a professionally designed agreement can save you a lot of anxiety in the future. Only U.S.-registered aircraft that are eligible to operate under Subpart F of Far1 Part 91 may use a condominium agreement. To be eligible, the aircraft must belong to one of the following groups: In a condominium agreement, you have the option to select co-owners and select individuals whose aircraft needs and flight habits complement your own. The term “co-ownership” is often used as a synonym for “partnership”.
However, these two agreements are not technically identical. A partnership includes an association of two or more persons who continue to carry on business as co-owners of a for-profit business. Therefore, a partnership involves something much more complex than simple co-ownership. The goal of a partnership is to make a profit. So if you just want to share ownership of an airplane with another person, you`re a co-owner, not a partner. Guidelines and Considerations for Joint Lease and Management Agreements with Business Aircraft, such as . B co-ownership. Flights operated under a timeshare agreement may be subject to federal excise duty (FET). For more information on this tax, members should access the NBAA`s web resource on irs commercial transportation taxes for Part 91 flights. The most important difference between these two forms of ownership is related to the disposition of the interests of each co-owner upon his death. The common interest of a tenant passes to the heirs of a person in accordance with his will or in accordance with the law of the State if there is no will.
The heirs and the surviving co-owner(s) then become roommates. Roommate, on the other hand, is characterized by the right of a survivor, which means that the interest of a deceased roommate is transferred to the surviving roommate(s). In the context of aircraft co-ownership, this would mean that upon your death, your share of the aircraft would go directly to your co-owner and not to your heirs. Aircraft, including piston aircraft, small aircraft and all helicopters operating under the NBAA`s small aircraft exemption, may also take advantage of refundable options permitted under Part 91, Subdivision F, such as . B an exchange agreement. For more information, NBAA members can find the Small Aircraft Liberation web resource. Buying an aircraft, new or used, is always an important investment. A common and easy way to spread these costs is to share the cost with other buyers. A condominium contract can reduce operating costs by half, or even quarterly. This thematic report contains information on how to properly establish a joint or joint tenancy. The Q&A section provides answers to frequently asked questions, but if they still need information, feel free to call the Pilot Information Center at 800-USA-AOPA (872-2672) Monday through Friday from 8:30 a.m. to 6:00.m a.m.
.m ET. AOPA`s aeronautical specialists will be happy to help you. There are different types of condominium agreements. The most common is called a rental. The other general type of co-ownership is called colocation. In a flatshare, the co-owners are called roommates or roommates. In a roommate, they are called roommates. Subsection F – Large and Turbine Multi-Engine Aircraft and Fractional Ownership Program Let`s take a look at some specific questions we often hear from members. Information and best practices to help new flight services deal with tax and legal issues… .