Advice Needed: Missing Aircraft Log Entries

[frustrated_flyer]

I need some advice. I am trying to sell my airplane and it seems like it's been one headache after another. I had a prospective buyer lined up and the bank wanted copies of all of the logbooks. I scanned them all and sent them to the bank. Well, it appears that the aircraft logbook is incomplete. It shows annuals up to 1987 and then it jumps and the next entry is 2006. The airplane didn't fly from 2001-2006, so those years don't count. But, there are no entries for '87-'01 in the Aircraft Log. Looking at the Engine Log, you can see that the airplane was flying and in annual. Well, because of this, the bank believes my airplane is only worth about $23,00 even though it was appraised at $38,000. I'm so frustrated right now and at a loss on what to do. I hate to involve lawyers and never had been keen on suing anyone, but the shop that did my pre-buy should have found this problem. The mech even looked at the logs and said all was good. This is now really screwing me up. The prospective buyer still wants the plane, but now he's afraid he's going to get screwed down the road if he buys an airplane with incomplete logs. Will missing those entries have such a big impact on the value of the plane? Any advice would be much appreciated!

 

[RotorAndWing]

I need some advice. I am trying to sell my airplane and it seems like it's been one headache after another. I had a prospective buyer lined up and the bank wanted copies of all of the logbooks. I scanned them all and sent them to the bank. Well, it appears that the aircraft logbook is incomplete. It shows annuals up to 1987 and then it jumps and the next entry is 2006. The airplane didn't fly from 2001-2006, so those years don't count. But, there are no entries for '87-'01 in the Aircraft Log. Looking at the Engine Log, you can see that the airplane was flying and in annual. Well, because of this, the bank believes my airplane is only worth about $23,00 even though it was appraised at $38,000. I'm so frustrated right now and at a loss on what to do. I hate to involve lawyers and never had been keen on suing anyone, but the shop that did my pre-buy should have found this problem. The mech even looked at the logs and said all was good. This is now really screwing me up. The prospective buyer still wants the plane, but now he's afraid he's going to get screwed down the road if he buys an airplane with incomplete logs. Will missing those entries have such a big impact on the value of the plane? Any advice would be much appreciated!

So when your mechanic said "all was good" did you have him elaborate? "All was good" could have meant that the aircraft is current in all inspections and AD's. Did you specifically ask to see if there was continuation throughout the logs (i.e. no missing pages, no missing AD's or inspections?)

FWIW, you, the owner are responsible for all aircraft records, not your mechanic.

 

[Silvaire]

Wow, $15,000 for a missing logbook? That is incredibly ridiculous. An airplane is what it is in the present time now and records that are 15 to 28 years old aren't going to change that. Bankers are complete idiots. What on Earth could possibly be in that old logbook that would be worth that kind of money to someone?

 

[RotorAndWing]

Wow, $15,000 for a missing logbook? That is incredibly ridiculous. An airplane is what it is in the present time now and records that are 15 to 28 years old aren't going to change that. Bankers are complete idiots. What on Earth could possibly be in that old logbook that would be worth that kind of money to someone?

I agree with you, however the bank is using this airplane as collateral. If they loan full value then have to take the plane back on a default they are going to have the same problem the OP is having now. Buyers will balk on missing log entries and yes it does effect resale value. As far as a number on that resale value, someone in the bank's loan department has to make that call.

 

[Silvaire]

I would think that if you are going to devalue something 40% you'd have something more substantial to base it on than just pulling a number out of your a$$. That's just plain crazy.

 

[RotorAndWing]

I would think that if you are going to devalue something 40% you'd have something more substantial to base it on than just pulling a number out of your a$$. That's just plain crazy.

Would you loan him full value if this was your money you are tying up on this?

 

[Henning]

I've kinda wondered where banks get their valuations. Back in 2008 I was repoing $75,000 C-150s for B of A, even at that time it was a crazy valuation.

 

[Kristin]

I need some advice. I am trying to sell my airplane and it seems like it's been one headache after another. I had a prospective buyer lined up and the bank wanted copies of all of the logbooks. I scanned them all and sent them to the bank. Well, it appears that the aircraft logbook is incomplete. It shows annuals up to 1987 and then it jumps and the next entry is 2006. The airplane didn't fly from 2001-2006, so those years don't count. But, there are no entries for '87-'01 in the Aircraft Log. Looking at the Engine Log, you can see that the airplane was flying and in annual. Well, because of this, the bank believes my airplane is only worth about $23,00 even though it was appraised at $38,000. I'm so frustrated right now and at a loss on what to do. I hate to involve lawyers and never had been keen on suing anyone, but the shop that did my pre-buy should have found this problem. The mech even looked at the logs and said all was good. This is now really screwing me up. The prospective buyer still wants the plane, but now he's afraid he's going to get screwed down the road if he buys an airplane with incomplete logs. Will missing those entries have such a big impact on the value of the plane? Any advice would be much appreciated!

The shop arguably should have found that on the pre-buy, but as there is no standard for a pre-buy and the vast majority of mechanics don't know how to do one, you end up with results such as you are experiencing. Mechanics are taught to assess the condition of the aircraft at one given point in time. They are not trained to look at the history and they are not trained to project forward regarding the probably near term costs of maintenance. Both of which a prospective buyer wants to know, but an owner doesn't need to know.

If you sue the shop, their attorney will maintain that they assessed the condition of the aircraft and found it to be airworthy. They will argue that you could have looked at the logbooks yourself and determined that a large chunk of time was unaccounted for. Your attorney will argue that he should have done more, but unless you asked him/her to review the logs and report on the history and completeness, you don't have anything to show that the shop had a duty to look at the past logbooks. Only the lawyers would win here.

 

[Henning]

In fairness to the mechanic, it's not their job to inspect the continuity of the logbooks unless you specifically ask; that is your job as the buyer, or the agent you hire to represent you.

 

[Kristin]

The point being that if you want expertise in evaluating and purchasing an aircraft, you need to hire someone with those skills. The vast majority of mechanics do not have those skills.

 

[Henning]

The point being that if you want expertise in evaluating and purchasing an aircraft, you need to hire someone with those skills. The vast majority of mechanics do not have those skills.

Yep...

 

[frfly172]

When you purchased the plane did you review the logs? The mechanic probably checked the logs for damage history and ad currency. Also he probably reviewed the logs you gave him. You can dislike the bank but it's their money,so they make the rules.

 

[Henning]

Likelihood is you'll either take the hit (maybe negotiate it up some if you have some evidence of value that includes the missing documents in the appraisal, BTW, why didn't the pro appraiser find this? I would get a notarized statement from them as to why those missing pages don't affect the value) or wait for a cash buyer that doesn't try to knock you down the same; good luck with that.

 

[Dr. O]

The log book represents half the total value of an aircraft.
Eight years of missing log entries could be a cover up for the fact the plane was totaled. Not saying yours was or is, just pointing out the reason for the drop in value in the eyes of a buyer when logs ore incomplete or missing.

An mechanic I know (30+ years ago) had his rental Cherokee 140 crashed. He purchased two totaled out Cherokee 140's for their value as scrap - no logs or CoA with either. One had the front fuselage buckled and the other had the tail section crushed. He drilled the rivets on both airframes just behind main spar and took them apart in halves. Then jigged the two good halves together and drove new rivets. The engine/instruments/radios/etc. were transferred into the new airframe. The data plate/logs from his original airplane were then applied to the "new" airplane and it was flown to Mena for a paint job. That plane continues to fly off my local airport to this day. It retains full value because the logs are "complete".

 

[bnt83]

I never expect to find complete logs. Many are missing a Weight and Balance paper trail. Others are missing Equipment Lists. Many have unknown interior parts and were never weighed after completion. Then there are owners who don't log any maintenance they do. If I had a $50k engine every single oil change I do is gonna be logged, yet I know many who forget about it.

80% of old logs don't have enough detail to be useful because the way they did things in 1968 aren't the same as today.

Prebuy - The actual physical condition of the aircraft is far more important than chasing papers from 20 years ago. Sure ADs need to be verified but I doubt anyone is going to build a spreadsheet to get the big picture on a one page document. I've seen chronic vacuum pump problems by doing the spreadsheet thing...


If these records were truly audited most of these airplanes wouldn't pass the mustard.

 

[Arrow115]

So you have logs for the last 8 years showing that the plane was maintained and flown? The recent history would be more important to me as a buyer. I would have some concerned about damage history during the missing years as another poster pointed out, but that could be worked out.

Unless you really need to unload it, I would take a hard stance and tell the buyer he can make up some of the difference or he can find another plane. I would allow some room for compromise, but be fair to yourself.

Do you have any receipts or invoices for work performed during the missing years? You may be able to recreate the logs. Or at least establish that the plane was flying and being maintained. Its better than nothing.

 

[Fearless Tower]

I agree with you, however the bank is using this airplane as collateral. If they loan full value then have to take the plane back on a default they are going to have the same problem the OP is having now. Buyers will balk on missing log entries and yes it does effect resale value. As far as a number on that resale value, someone in the bank's loan department has to make that call.

Exactly. If the buyer defaults, the bank has to sell it and they know it will be difficult to get full value with missing logs.

 

[poadeleted20]

Unless you really need to unload it, I would take a hard stance and tell the buyer he can make up some of the difference or he can find another plane.

"Your offer is acceptable. Good bye."

You can't fight the bank on this one. You got hosed when you bought the plane, and not in an atypical fashion. For the rest of you out there, when you buy your first plane, get someone who's owned several to be your mentor and help you ask all the right questions. That's the only way you're going to avoid pitfalls like this.

I would allow some room for compromise, but be fair to yourself.

In this market, sellers don't have a lot of negotiating power on an issue like this. Despite what was said above, complete logs are not unusual.

Do you have any receipts or invoices for work performed during the missing years? You may be able to recreate the logs. Or at least establish that the plane was flying and being maintained. Its better than nothing.

That may or may not be true, but the only way to find out is to talk to a certified aircraft appraiser. NAAA has a list of such folks. The bank might listen to someone like that and raise their limit based on a certified appraisal.

 

[Henning]

So you have logs for the last 8 years showing that the plane was maintained and flown? The recent history would be more important to me as a buyer. I would have some concerned about damage history during the missing years as another poster pointed out, but that could be worked out.

Unless you really need to unload it, I would take a hard stance and tell the buyer he can make up some of the difference or he can find another plane. I would allow some room for compromise, but be fair to yourself.

Do you have any receipts or invoices for work performed during the missing years? You may be able to recreate the logs. Or at least establish that the plane was flying and being maintained. Its better than nothing.

Thing is he's the seller, so he needs a combo cash buyer who is also not concerned with paperwork but condition, and isn't into squeezing the last nickel of opportunity from the deal they can. This is not a particularly common entity.

 

[Henning]

"Your offer is acceptable. Good bye."

You can't fight the bank on this one. You got hosed when you bought the plane, and not in an atypical fashion. For the rest of you out there, when you buy your first plane, get someone who's owned several to be your mentor and help you ask all the right questions. That's the only way you're going to avoid pitfalls like this.

In this market, sellers don't have a lot of negotiating power on an issue like this. Despite what was said above, complete logs are not unusual.

That may or may not be true, but the only way to find out is to talk to a certified aircraft appraiser. NAAA has a list of such folks. The bank might listen to someone like that and raise their limit based on a certified appraisal.

Yep, my 1960 plane had complete logs to day one, including the logs for engines and props that no longer were on the plane. The other issue that comes up with missing logs is they are often part of a clouded title. Those logs may live in some mechanic's safe along with the evidence of the lien. Now the bank will likely figure in either the risk value, or the cost of title insurance to protect their interest.

 

[poadeleted20]

Yep, my 1960 plane had complete logs to day one, including the logs for engines and props that no longer were on the plane.

I'm wondering how the engines and props got away without their logs. Could be a real problem for whoever ends up with them.

The other issue that comes up with missing logs is they are often part of a clouded title. Those logs may live in some mechanic's safe along with the evidence of the lien. Now the bank will likely figure in either the risk value, or the cost of title insurance to protect their interest.

I don't think that's true at all. If a mechanic just puts the lien in a safe rather than filing it with the FAA, it's worthless once the title passes to the next owner once the new owner records his title -- lots of case law on point. Only way that mechanic will be able to make that lien stick is to file it with the FAA before the old owner sells the plane, and in that case, it will have already shown up on the title search. That's why smart mechanics don't let the plane out of their shop until the bill is paid (giving them first bite of the apple), or at least until the lien is filed (giving them a guarantee of a bite of whatever's left of the apple after prior lienholders are satisfied). So, I don't see missing logs being a sign of a title problem if there's nothing found in the title search.

 

[Henning]

I'm wondering how the engines and props got away without their logs. Could be a real problem for whoever ends up with them.

I don't think that's true at all. If a mechanic just puts the lien in a safe rather than filing it with the FAA, it's worthless once the title passes to the next owner once the new owner records his title -- lots of case law on point. Only way that mechanic will be able to make that lien stick is to file it with the FAA before the old owner sells the plane, and in that case, it will have already shown up on the title search. That's why smart mechanics don't let the plane out of their shop until the bill is paid (giving them first bite of the apple), or at least until the lien is filed (giving them a guarantee of a bite of whatever's left of the apple after prior lienholders are satisfied). So, I don't see missing logs being a sign of a title problem if there's nothing found in the title search.

When you turn in engines on FRMN engines they don't take the logs.

 

[poadeleted20]

When you turn in engines on FRMN engines they don't take the logs.

That's not my experience with Lycoming, but perhaps TCM operates differently. I believe they would be unable to do anything but zero-time rebuild them (as opposed to overhauling) in that case since they could not carry forward any times on any components without seeing the old logs.

 

[Henning]

That's not my experience with Lycoming, but perhaps TCM operates differently. I believe they would be unable to do anything but zero-time rebuild them (as opposed to overhauling) in that case since they could not carry forward any times on any components without seeing the old logs.

They sell remans (and new), they overhaul your engines.

 

[poadeleted20]

They sell remans (and new), they overhaul your engines.

So with TCM, all exchanged engines are zero-time rebuilt, never overhauled. Thanks -- that explains the engines. What about the props?

 

[Henning]

So with TCM, all exchanged engines are zero-time rebuilt, never overhauled. Thanks -- that explains the engines. What about the props?

Props were dead and done, condemned and replaced with new Top Props. I imagine he turned them in for scrap when he cleaned the hangar.

 

[Bill]

In fairness to the mechanic, it's not their job to inspect the continuity of the logbooks unless you specifically ask; that is your job as the buyer, or the agent you hire to represent you.

Pretty much. When we bought the Mooney, my partner and I EACH went through the logs page by page, then compared notes.

Even then, though, log books are funny things. They can mean a lot, and at the same time, they can mean very little.

We looked at several birds that were represented as NDH and had no damage/repairs noted in the logs. Removing inspection panels proved otherwise.

 

[Henning]

Pretty much. When we bought the Mooney, my partner and I EACH went through the logs page by page, then compared notes.

Even then, though, log books are funny things. They can mean a lot, and at the same time, they can mean very little.

We looked at several birds that were represented as NDH and had no damage/repairs noted in the logs. Removing inspection panels proved otherwise.

Yeah, I've seen log entries you have to read between the lines and understand what those maintenance items add up to to figure out someone smashed the wing into a light standard.

 

[CTLSi]

Wow, $15,000 for a missing logbook? That is incredibly ridiculous. An airplane is what it is in the present time now and records that are 15 to 28 years old aren't going to change that. Bankers are complete idiots. What on Earth could possibly be in that old logbook that would be worth that kind of money to someone?

Logbooks are GOLDEN. If an aircraft is sitting unused for years, it still requires an annual, remember the airframe is also aging. If those weren't done, then the bank has a point.

 

[Henning]

Logbooks are GOLDEN. If an aircraft is sitting unused for years, it still requires an annual, remember the airframe is also aging. If those weren't done, then the bank has a point.

The plane only needs an annual if in use. An annual wont do anything about aging.

 

[Silvaire]

The log book represents half the total value of an aircraft...

You're joking, right? Who even makes such an assertion?

I've seen an awful lot of logbooks in my time and I can tell you that they are mostly full of nothing. Even when there is damage there's a good chance it ain't gonna be in there. Anyone who believes that 50% of an aircraft's value is in those books isn't playing with a full deck.

 

[Henning]

Normally if you have the last 10 years and all ADs listed and researched, missing logs prior to that are worth typically 10%-15%. If the current logs are missing and you have a plane with a long potential AD list with some expensive ones, then yes, that log book could be worth half the value of the plane, especially if you have something like a Comanche 180.

 

[Silvaire]

Well I'd suggest owners do what I do with every new customer and that is to photocopy the logs with my digital camera, takes only a couple of minutes.

Of course now someone's going to come along and say that photocopies will only mitigate a fraction of the devaluation

 

[poadeleted20]

You're joking, right? Who even makes such an assertion?

I've seen an awful lot of logbooks in my time and I can tell you that they are mostly full of nothing. Even when there is damage there's a good chance it ain't gonna be in there. Anyone who believes that 50% of an aircraft's value is in those books isn't playing with a full deck.

However, certified appraisers seem to think that a deduction of 30% for missing logs isn't out of line.

 

[Silvaire]

I'm just saying that "seem to think" and "have valid reason to assert" are two different things. If someone can come up with an actual reason why an aircraft should be worth 30-50% less on account of a missing 20 year old logbook I'd like to hear it.

Like I said, certified appraiser or not, these numbers are getting pulled out of someone's a**. There is no data anywhere to justify it other than someone saying it is so and someone else believing him. After all, what does "certified" mean? NARA and ISTAT are self serving associations whose interests lie in the promotion of the appraisal industry - period.

It's a bunch of horse-hooey.

 

[Jim Logajan]

The log book represents half the total value of an aircraft.

However, certified appraisers seem to think that a deduction of 30% for missing logs isn't out of line.

I presume then that there should be an observable bifurcation in the market, where planes with incomplete logs have selling prices that cluster 30 to 50% lower than planes with complete logs? Or are planes with incomplete logs too rare to create a separate market?

Point being, if I and others wanted a cheaper plane and the above claims are true, we'd go looking for the ones that look good right now mechanically but have missing logs. Of course if there are enough of us doing that, demand may exceed supply and next thing you know the selling price isn't discounted as much as we like.

So is there supporting sales statistics for what bankers and appraisers are claiming?

 

[RotorAndWing]

I'm just saying that "seem to think" and "have valid reason to assert" are two different things. If someone can come up with an actual reason why an aircraft should be worth 30-50% less on account of a missing 20 year old logbook I'd like to hear it.

Like I said, certified appraiser or not, these numbers are getting pulled out of someone's a**. There is no data anywhere to justify it other than someone saying it is so and someone else believing him. After all, what does "certified" mean? NARA and ISTAT are self serving associations whose interests lie in the promotion of the appraisal industry - period.

It's a bunch of horse-hooey.

It is, agreed.

But it boils down to this: the lender has the money, if you want said money, he sets the rules.

 

[Henning]

I'm just saying that "seem to think" and "have valid reason to assert" are two different things. If someone can come up with an actual reason why an aircraft should be worth 30-50% less on account of a missing 20 year old logbook I'd like to hear it.

Like I said, certified appraiser or not, these numbers are getting pulled out of someone's a**. There is no data anywhere to justify it other than someone saying it is so and someone else believing him. After all, what does "certified" mean? NARA and ISTAT are self serving associations whose interests lie in the promotion of the appraisal industry - period.

It's a bunch of horse-hooey.

Yep, but guess who generates the data? The market, that's what appraisers go by, a culmination of histories on deals and comps. We live in a Capitalist society so actual value has no affect on price. Yes, it's horse-hooey. They knock 40% off for log books because the market says they can.

 

[Henning]

I presume then that there should be an observable bifurcation in the market, where planes with incomplete logs have selling prices that cluster 30 to 50% lower than planes with complete logs? Or are planes with incomplete logs too rare to create a separate market?

Point being, if I and others wanted a cheaper plane and the above claims are true, we'd go looking for the ones that look good right now mechanically but have missing logs. Of course if there are enough of us doing that, demand may exceed supply and next thing you know the selling price isn't discounted as much as we like.

So is there supporting sales statistics for what bankers and appraisers are claiming?

Not really enough to support a separate market, and you are correct, if enough people seek planes with missing logs, they will go to a premium. That's the way a Market Economy operates, all values are set by perception.

 

[Stache]

Many mechanics myself are very careful on pre-buy inspections because of cases like this and the reason I wrote a book about it. First, what were the conditions on the pre-buy inspection the mechanic was required to perform these should have be spelled on the pre-purchase contract. Remember a pre-buy inspection is NOT recognized by the FAA as an inspection, but the removal of parts and such is considered maintenance and requires a part 43.9 record entry. Therefore, if the mechanic performed a compression test there should be a powerplant record entry for the work performed.

The pre-buy inspection contract should explain exactly what the owner wants the mechanic to inspect. This inspection could be a records check to a full annual type inspection. So check your pre-buy inspection contract and see what it said for the mechanic to perform.

I do these inspections myself and have found the aircraft records to be the important and missing records should be account for in one way or another. You can order the FAA records on CD that will cover most everything these are the official records that will show accidents in most cases. The import records are really the past 10-years and all the modification and AD compliance.

On many older aircraft, the older records are sometimes lost and this is where the FAA records on CD are very import. What is important is tracking of life-limited parts and the total time for parts as well as major repair and alterations. I do this on a spreadsheet by dates and total time and what logbook they were recorded in. Not everyone does it as I do and I am sure the bank is looking for a document like this to fill in the missing blanks.