Liability Protection For Homebuilt Aircraft Sales

Discussion in 'General Experimental Aviation Questions' started by Daleandee, Sep 11, 2019.

Help Support HomeBuiltAirplanes Forum by donating:

  1. Sep 11, 2019 #1

    Daleandee

    Daleandee

    Daleandee

    Well-Known Member

    Joined:
    Sep 11, 2015
    Messages:
    857
    Likes Received:
    520
    Location:
    SC
    Curious ...

    Selling home built aircraft can have liability that some builders really try to avoid. Lately, on some other sites, I've seen ways that have been taken to reduce or eliminate risk. Some more serious than others.

    EAA has some good information here:

    https://www.eaa.org/eaa/aircraft-bu...-buying-articles/part-4-parting-out-liability

    Still some go beyond paper work or simply parting out:

    [​IMG]

    Still there is the absolute extreme way to protect oneself (perhaps this should have been added to the "Don't Do Anything Dumb" thread):



    I don't have any intention of selling my aircraft but if I did ...

    Dale
    N319WF
     
  2. Sep 11, 2019 #2

    Hot Wings

    Hot Wings

    Hot Wings

    Well-Known Member HBA Supporter

    Joined:
    Nov 14, 2009
    Messages:
    6,217
    Likes Received:
    2,192
    Location:
    Rocky Mountains
    My thought is that if you have enough assets that destroying your plane makes economic sense you have enough assets to justify consulting an asset protection attorney and implementing a good plan. After all we all can do dumb things just going about our daily life that can lead to a civil suit for damages. If you fear loosing what you have so much, and you haven't taken available steps to protect yourself...........!?

    While putting the plane into an LLC after it's built doesn't remove your personal liability, one option the article linked didn't mention is, maybe forming the LLC - before - starting the build, as the LLC, might offer another layer of protection?

    And remember that 50% of the attorneys graduated in the bottom half of their class.:oops:
     
    SVSUSteve likes this.
  3. Sep 12, 2019 #3

    Pops

    Pops

    Pops

    Well-Known Member

    Joined:
    Jan 1, 2013
    Messages:
    6,941
    Likes Received:
    5,853
    Location:
    USA.
    One of the reasons aviation is in a declining state.
     
    dmar836 and BJC like this.
  4. Sep 12, 2019 #4

    TFF

    TFF

    TFF

    Well-Known Member

    Joined:
    Apr 28, 2010
    Messages:
    11,452
    Likes Received:
    3,182
    Location:
    Memphis, TN
    Just never sell to someone who can afford a better lawyer than you.

    You can always tell who is not a good match for what you are selling. You might want the money but sometimes it’s better to politely get rid of them.
     
    dmar836 and Pops like this.
  5. Sep 12, 2019 #5

    fly2kads

    fly2kads

    fly2kads

    Well-Known Member HBA Supporter

    Joined:
    Jan 2, 2010
    Messages:
    1,444
    Likes Received:
    526
    Location:
    Justin, TX
    I have seen, as a juror, some of those attorneys in action in a civil case. They were laughably poor counsel. Lesson learned: choose your attorneys carefully.

    I sometime wonder if some of the extreme measures taken by homebuilders are misguided. From the first article in the series:
    There is good and bad news regarding tort liability. The good news is that it's a low probability risk. While a few such suits have been filed, EAA has not heard of even one of them being successful.
    Still, every builder/seller needs to determine their own level of tolerance for the risk of becoming the 1st.
     
    SVSUSteve likes this.
  6. Sep 12, 2019 #6

    D Hillberg

    D Hillberg

    D Hillberg

    Well-Known Member

    Joined:
    Nov 24, 2010
    Messages:
    1,147
    Likes Received:
    421
    Location:
    very low low low earth orbit
    So he sold the engine, accessories, fuel tanks, pump. tires, battery, all bits of odds and ends. . .
    Each piece a liability if it fails in service . . .Who'd a thunk.
    Why the same fuel pump in a piper is two different prices in left or right wing....depending on location

    Lawyers and political hack suck the life out of this world..
     
    akwrencher likes this.
  7. Sep 12, 2019 #7

    BJC

    BJC

    BJC

    Well-Known Member

    Joined:
    Oct 7, 2013
    Messages:
    9,362
    Likes Received:
    6,134
    Location:
    97FL, Florida, USA
    When I bought my first airplane, an E-AB S-1S, we got to the point where I said that we had a deal; I would take the airplane at the agreed price. The seller replied that he had to decide if he was willing to sell to me. He interviewed me for over half an hour.


    BJC
     
  8. Sep 12, 2019 #8

    proppastie

    proppastie

    proppastie

    Well-Known Member

    Joined:
    Feb 19, 2012
    Messages:
    3,666
    Likes Received:
    1,059
    Location:
    NJ
    after you are dead I wounder if the estate can be held liable .....after the estate is settled might have a hard time getting money or calling witnesses
     
  9. Sep 12, 2019 #9

    Pops

    Pops

    Pops

    Well-Known Member

    Joined:
    Jan 1, 2013
    Messages:
    6,941
    Likes Received:
    5,853
    Location:
    USA.
    When I was selling my 1956 C-172 complete restoration and after flying it for 3 years there was 6 buyers in line wanting to buy it. After talking to the first buyer I told him that this airplane was not for sale to him. He was wanting me sign a 3 page nutty agreement. I told him the fact that he wanted me to sign such a paper is the reason he is not buying my airplane. Second buyer was an IA and knew what he was looking at. He bought it and flew it for many years and was happy.
    Like BJC said, the buyer has to pass my test. The best time to sell is when you don't have to sell so you can sell on your terms.
     
    BJC and akwrencher like this.
  10. Sep 12, 2019 #10

    Hephaestus

    Hephaestus

    Hephaestus

    Well-Known Member

    Joined:
    Jun 25, 2014
    Messages:
    973
    Likes Received:
    213
    Location:
    YMM
    The ultimate solution for Americans. Sell them exported to Canadian owners ;)

    That's the ticket, we'll just send an apology for crashing your plane and move on :)

    Win frickin win. Sold outside of the USofA jurisdiction to citizens who aren't litigation happy.
     
    Derswede likes this.
  11. Sep 12, 2019 #11

    Pops

    Pops

    Pops

    Well-Known Member

    Joined:
    Jan 1, 2013
    Messages:
    6,941
    Likes Received:
    5,853
    Location:
    USA.

    A lot of the U.S. GA fleet is leaving the U.S. I sold the 1959 C-172 that I restored to a man in Germany with a private museum of about 40 airplanes. He bought my airplane along with a 1937 Fairchild and a T-6 Texan. My neighbor sold his 1947 Stampe bi-plane to someone in Spain, etc.
     
  12. Sep 12, 2019 #12

    TFF

    TFF

    TFF

    Well-Known Member

    Joined:
    Apr 28, 2010
    Messages:
    11,452
    Likes Received:
    3,182
    Location:
    Memphis, TN
    The WW2 stuff is more like collector cars. They get moved around. I also think once it’s got a US airworthiness cert, it’s gold in another country. Trying to get one from their home country sounds impossible sometimes.

    Actually parting out and splitting it up. The chance of every piece you will be sued for is small. If you are misrepresenting, you probably deserve it. Your worried about airplanes, but mostly if it’s expensive, your on the hook for every thing you get rid of. I have some old cars. Friends with motorcycles, expensive collector furniture or any other collectible. No one is suing over a $60 used lawnmower. I think sometimes there is an aviation disconnect in both directions. That and aviation people tend to bet the farm on their toys in hopes they get out what they put in. Borrowing from someplace where you should not be funding a hobby with. Then they get desperate if it’s not going well.
     
  13. Sep 12, 2019 #13

    Little Scrapper

    Little Scrapper

    Little Scrapper

    Well-Known Member HBA Supporter

    Joined:
    Jan 3, 2014
    Messages:
    5,349
    Likes Received:
    3,272
    Location:
    Wisconsin
    I have family members and friends who are attorneys, I've brought this topic up several times. Anyone can be sued for anything, it's just a fact of life.
     
  14. Sep 12, 2019 #14

    Little Scrapper

    Little Scrapper

    Little Scrapper

    Well-Known Member HBA Supporter

    Joined:
    Jan 3, 2014
    Messages:
    5,349
    Likes Received:
    3,272
    Location:
    Wisconsin
    Just my opinion but I think aviation is in really great shape as it concerns lawsuits. I don't see any real problem that's obvious anyhow.

    How often do we hear of homebuilt lawsuits? Almost never.
     
    dmar836 likes this.
  15. Sep 13, 2019 #15

    Daleandee

    Daleandee

    Daleandee

    Well-Known Member

    Joined:
    Sep 11, 2015
    Messages:
    857
    Likes Received:
    520
    Location:
    SC
    I almost had my first Sonex go that way but the guy wanted me to fly it to him. I told him I wasn't doing that. He insinuated that it wouldn't make it that far so I left him alone. After flying it over to the American Sonex Association (he found out from the web) he called back and wanted to talk again. The deal didn't work for various reasons as I knew this wasn't the buyer I was looking for.

    Then a young lady called from the other side of the country and said she wanted it and was flying over commercial to pick it up. She came a long way and we looked at the airplane thoroughly as it rained most of the day. She was intrigued and when it finally quit raining we went for a flight. She didn't attempt to fly it too long before we went back and landed. She called the next morning to say I was gonna be mad at her. Told her I wasn't mad that she didn't want the plane. She asked how I knew that.

    She couldn't fly it as it was very different from the Rans S-14 she was used to flying. I was asked if I'd spend a few days showing her how to fly & land it. Nope ... I wasn't going to sell an airplane to an unfamiliar pilot that would literally have to fly it coast to coast. Wasn't gonna happen.

    The sale came when a gentleman that was both a pilot and a good VW mechanic came down and looked the airplane over and flew it with me. He had a great time boring holes in the sky. After the sale we kept in touch for a few years until he finally sold the plane due to health reasons. He thanked me for selling him a great airplane that served him well.

    All of that to say what others have said ... finding the right owner for a plane that you are looking to sell is important. One of the most preventable ways people kill themselves in airplanes is when they buy more airplane than they can handle and then refuse to get a good instructor to teach them how to fly it believing that they are capable of figuring it out on their own.

    Dale
    N319WF
     
    dmar836, pictsidhe and rdj like this.
  16. Sep 13, 2019 #16

    Pops

    Pops

    Pops

    Well-Known Member

    Joined:
    Jan 1, 2013
    Messages:
    6,941
    Likes Received:
    5,853
    Location:
    USA.

    Very well said. My daughter still talks about me refusing to sell an airplane because the buyer wouldn't promise to keep it hangered.
     
  17. Sep 14, 2019 #17

    Malish

    Malish

    Malish

    Well-Known Member

    Joined:
    Oct 11, 2013
    Messages:
    431
    Likes Received:
    718
    Location:
    Russia. City of Volgograd
    I'm agree with that. Some time ago I did sold Russian made Yak-18T(also certified as homebuilt) to two brothers from Pennsylvania. I flew this airplane to their home based airport(near Philadelphia) from Atlanta,Ga. There I flew with them in this aircraft, but I was in the left seat as PIC. Same day one of the brothers flew me to Philadelphia airport on their Pa-28 Arrow, from there I flew back home by airline.
    About year past I found out that both brothers were killed in the crash in my former aircraft. Few month latter attorney from one brother widow called me and stated that I was shown in brothers log books as instructor, who give them 20 hrs of instructions in this aircraft. When I stated to attorney, that I'm not holding instructor license and possibly couldn't give them 20 hrs of instruction flights in same day.
    After that I didn't hear from that attorney anymore.
     
  18. Sep 14, 2019 #18

    Daleandee

    Daleandee

    Daleandee

    Well-Known Member

    Joined:
    Sep 11, 2015
    Messages:
    857
    Likes Received:
    520
    Location:
    SC
  19. Sep 14, 2019 #19

    pictsidhe

    pictsidhe

    pictsidhe

    Well-Known Member

    Joined:
    Jul 15, 2014
    Messages:
    6,478
    Likes Received:
    1,679
    Location:
    North Carolina
    This.

    I do wonder if many of the people scrapping an aircraft due to liability concerns are actually doing it because they know that there is something seriously wrong with it.

    If I start making kits, I will definitely be hiring a lawyer re liability. If I sell a single aircraft privately, I'll make sure there is nothing dangerous about it.
     

Share This Page

arrow_white