Attorney for an aircraft purchase?

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Gordon Freeman

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GordonF
Happy September to everyone.
I am looking to acquire a used 152 in the 30-40k price range. I've gotten a few quotes from aviation attorneys ranging from $3-$5k for writing and negotiating the purchase agreement.

For a minute I was happy that GA aircraft purchases are not subject so state sales tax. However, it seems that my excitement was short lived.

Just how important is an attorney for a purchase of this sort? The legal fees are double what we paid for closing our house, which is why I ask.

Buying a $700k Cirrus - sure. But a banged-up $35k Cessna?

I'd love to hear thoughts and opinions from those who have a bit more experience in the arena.

Thanks a million!
 
You don't need a lawyer. You need a bill of sale (aopa has a standardized one online) and a check. Might consider escrow for a higher dollar plane, but for 35k I'd just pay the guy.
 
Ah, just as I thought. Attorneys will always find a reason to justify their services. I just sold my car for just as much. Bill of sale and cash seems to do the trick. Perhaps a A&P to look over the records, the plane, and make sure nothing throws a red flag. That's about all I can think of. Thanks for your input.
 
Would you hire an attorney to buy a used car ?

The reason attorneys have inserted themselves in real estate transactions is because they wrote the state laws that make it so. There isnt any 'negotiating' in a used aircraft transaction that requires an attorney. There is no legal question that needs answering. You are buying a piece of personal property in 'as is where is' condition in exchange for an agreed upon amount of cash.

Consider using one of the aviation escrow companies. Their fees are quite reasonable to cover both the title search and ensuring that the registration gets submitted before the seller gets his money.

What you need is a mechanic familiar with 152s to tell you whether :
A. the plane is as represented by the seller
B. whether there are any mechanical items that are likely to cost your money
C. all the airworthiness directives that apply to this airframe are complied with and documented.
 
IMHO, attorneys (and escrow companies) are a total waste of money on relatively-low-dollar aircraft transactions. Your money is better spent on a good prebuy inspection and/or squirreled away for the inevitable post-sale maintenance issues. Most all of what you need to know can be figured out by doing just a little bit of reading and using a little bit of common sense. That said, you absolutely should get a registration search done (which will show you the title history, if there are any liens, and who the current legal owner of the airplane is).
 
You don't need an attorney. If you want a sales agreement, go to AOPA - https://www.aopa.org/go-fly/aircraft-and-ownership/buying-an-aircraft they have a sample one you can tailor. There is also a bill of sale. Or get the bill of sale from the FAA's site https://www.faa.gov/documentLibrary/media/Form/ac8050-2.pdf

Sales agreement is good for specifying terms of the pre-buy and stuff like that. We used on on the first plane we looked at. Didn't use one on the second and everything worked out fine. Just had a prebuy done and the seller had bills of sale ready for us all signed and ready to go.

PM me (or is it DM now?) if you have any questions about the process. I just went through it and would be glad to help someone out. All the steps are fresh in my mind - things like pre-buy, bill of sale, setting up an LLC (if you are doing that), FAA registration paperwork, state registration and tax paperwork... insurance. It's all pretty easy, but there are bunch of cogs in the machine that need to be in place. Again, PM me if you want and I'll see if I can help before you hire and attorney and waste your money.
 
OTOH an attorney helped me with my airplane purchase, saving me low 5-digits in sales tax on something that everyone else missed and could have been an unpleasant hit.
Maybe everyone else is good at interpreting the interaction of multi-state tax laws however.
 
There are a ton of sales agreement samples around the internet. The FAA has a (required) Bill of Sale form and the (required) registration form you can download, and AOPA (through Aerospace Reports) will do a title search, airworthiness documents, registration documents, and accident/incident/337 reports. If you or the seller want, they'll provide escrow services (although that's usually the seller's responsibility). The reports come VERY promptly and there's a discount for AOPA members. I can't think of a reason to get an attorney involved.
 
if you really want an attorney to review bill of purchase, the easy option is to get AOPA pilot protection service, its one of the covered services
 
bradg33 said:
IMHO, attorneys (and escrow companies) are a total waste of money on relatively-low-dollar aircraft transactions. Your money is better spent on a good prebuy inspection and/or squirreled away for the inevitable post-sale maintenance issues. Most all of what you need to know can be figured out by doing just a little bit of reading and using a little bit of common sense. That said, you absolutely should get a registration search done (which will show you the title history, if there are any liens, and who the current legal owner of the airplane is).
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Your right for 99.9% of aircraft sales a bill of sale and title search works great for that. For the .1% that have a problem a simple title search that miss something, escrow will save you. Their are people out their that will pull a fast one on you Some title search company only stand behind what information is on record at the time they do the search, or limit their mistakes, escrow with insurance covers all of it. If you buy a aircraft in Canada some loans run a little different than we do watch out.
 
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I’d just get a BoA loan. Let them handle the lien and title search. Once all that is good....pay off the loan if you choose.

I see no need for a lawyer.....I’ve never used one or had need for one. I’ve never seen one give a guarantee or warranty for their services.
 
Last plane I sold the buyer took the form I signed, then started pulling stacks of hundred dollar bills out of his coat. They were paper clipped together neatly in little bundles of $1000 each. I wasn't expecting that but it was fun.
 
Jim K said:
You don't need a lawyer. You need a bill of sale (aopa has a standardized one online) and a check. Might consider escrow for a higher dollar plane, but for 35k I'd just pay the guy.
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If you're going to pay cash. Most financing will require escrow as they won't fork over the money without an already executed bill of sale.
Only a fool seller would take unsecured funds and fork over the bill of sale.
 
When your tax liability might be double what the attorney will charge then you can think about it. Spend the money on a good A&P to review the records and look over the plane. You will get a much better return on your investment there.
 
Piperonca said:
Last plane I sold the buyer took the form I signed, then started pulling stacks of hundred dollar bills out of his coat. They were paper clipped together neatly in little bundles of $1000 each. I wasn't expecting that but it was fun.
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That type of cash thing (assuming more than $10,000) does get the attention of the IRS if and when you deposit it in your bank account, and in turn gets the attention of a variety of State and local law enforcement jurisdictions. That kind of thing does have the possibility of sucking all the fun out of the process. If one is going to pay for an airplane with a suitcase full of cash...be familiar with the Bank Secrecy Act.
 
MacFly said:
That type of cash thing (assuming more than $10,000) does get the attention of the IRS if and when you deposit it in your bank account, and in turn gets the attention of a variety of State and local law enforcement jurisdictions. That kind of thing does have the possibility of sucking all the fun out of the process. If one is going to pay for an airplane with a suitcase full of cash...be familiar with the Bank Secrecy Act.
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Truth be told it was assorted parts in different locations that had decades ago comprised an airplane. Sad story which I won’t go into but there was a couple pieces of paper and a data plate to go with the parts. Didn’t take many of those stacks to buy it so I just used them for pocket money. Didn’t need a suitcase.
 
A single large deposit isn't going to attract attention. The triggers come from many, just under $10K deposits.
Then they think you're structuring your deposits to hide things that would have triggered federal notification,
 
Let'sgoflying! said:
OTOH an attorney helped me with my airplane purchase, saving me low 5-digits in sales tax on something that everyone else missed and could have been an unpleasant hit.
Maybe everyone else is good at interpreting the interaction of multi-state tax laws however.
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So much of the use of an attorney depends on the transaction. You don't need one until you need one. When's that? Well, like most transactions, so long as there are no problems waiting in the wings, you might never need one. And the odds are probably in your favor. On the flip side, even a 10% PROB means that it can and if a problem does show up, it's usually more expensive to fix it than to have prevented it by treating an attorney's review of the transaction as part of the cost of purchase (then, of course, it's the attorney's fault if he or she can't fix the problem the client created).

I've seen sales of experimentals, standard pistons, and even jets on little more than a handshake. Of course when I saw those it was to pay me some big bucks. An interesting one involved the use of the AOPA contract. The parties decided they didn't need one of the provisions so they deleted it. Seemed pretty innocuous. Guess what the lawsuit involved.

@Gordon Freeman, I don't know the Westchester market but those fees seem high to me for a purchase of a 152.
 
midlifeflyer said:
@Gordon Freeman, I don't know the Westchester market but those fees seem high to me for a purchase of a 152.
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152 are very hot right now and have been for the past year or so... any plane below $40K has some high hours associated to it. I have seen a few in the $48K range sell pretty fast..

Getting back to the question, like other have mentioned, have a good A&P that knows the 152 give it the once over so you know what you are getting. Good luck
 
No matter the price, I think a good title search is appropriate. Using an escrow company (which will have a staff lawyer) makes that simple and is pretty cheap. Also, the FAA registration is not complicated but if you only do it every few years, easier to let them do it.

On the title search, it can be a mess if there are liens involved. About a year ago there was a BO209 Mitsubishi Monsoon on our field. Flat tires, covered in bird doo, out of registration, the usual. I thought it would make a good project plane. Tracked down the owner and was able to work out a purchase at an appropriate price for a project. But...the title search uncovered a lien by Kalifornia for a $160 tie-down fee 20 years ago. When we tried to clear it, it appears it had ballooned to over $60K with fines and fees. The KA window to appeal was over and they wouldn't budge. If we had bought the plane without checking, we likely would be buying the lien too. We ended buying the parts, but it'll never fly again. Sad, but I'm sure glad we did the title search, and recommend one strongly.
 
WannFly said:
if you really want an attorney to review bill of purchase, the easy option is to get AOPA pilot protection service, its one of the covered services
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I used this recently and highly recommend it. If you call the AOPA they will give you a list of aviation attorneys in the area. The pilot protection service covers 1 hour of consultation time per year, which should be sufficient to review contracts or sales agreements. Even if you went over an hour, it is money well spent for a little more confidence and peace of mind.
 
Ventucky Red said:
152 are very hot right now and have been for the past year or so... any plane below $40K has some high hours associated to it. I have seen a few in the $48K range sell pretty fast..

Getting back to the question, like other have mentioned, have a good A&P that knows the 152 give it the once over so you know what you are getting. Good luck
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Oh, I wasn't referring to the price of the 152.
 
Every transaction brings a certain amount of risk that the expectations of one party or the other will not be met. Seller-financing a $1 million airplane brings a different amount of risk than a cash transaction on a $30,000 airplane, just like buying a new TV brings a different amount of risk than buying a doughnut. While only you can judge whether the risks of your situation justify the expense of mitigating them through professional legal assistance (and you may actually need legal advice to make that judgment), Mitch Hedberg best taught the lesson of putting each transaction into perspective.

 
jbarrass said:
No matter the price, I think a good title search is appropriate. Using an escrow company (which will have a staff lawyer) makes that simple and is pretty cheap. Also, the FAA registration is not complicated but if you only do it every few years, easier to let them do it.

On the title search, it can be a mess if there are liens involved. About a year ago there was a BO209 Mitsubishi Monsoon on our field. Flat tires, covered in bird doo, out of registration, the usual. I thought it would make a good project plane. Tracked down the owner and was able to work out a purchase at an appropriate price for a project. But...the title search uncovered a lien by Kalifornia for a $160 tie-down fee 20 years ago. When we tried to clear it, it appears it had ballooned to over $60K with fines and fees. The KA window to appeal was over and they wouldn't budge. If we had bought the plane without checking, we likely would be buying the lien too. We ended buying the parts, but it'll never fly again. Sad, but I'm sure glad we did the title search, and recommend one strongly.
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Stuff like that is infuriating. I know a guy who got a bill from the New York port authority forties down fees. The only problem was he had never flown the plane east of Indiana. Port authority got the wrong tail number, but kept sending invoices. He showed me all the emails and had it documented who he talked to on the phone and when. Took over a year before they stopped sending bogus invoices.
 
10 billable hours to handle a purchase transaction for a piece of personal property. If anything, it tells us something about the oversupply of lawyers in your area.
 
Maybe the one who needs a lawyer is the A & P that tries to read the potential AD list?
 
$3K - $5K seems pretty high. Keep in mind that the real costs will start if you go into litigation. Do you foresee spending thousands litigating a $35K asset?
 
midlifeflyer said:
Not before it's signed.
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I'm not sure what we're debating here. Perhaps I wasn't verbose enough in my reply to the OP. The point I was trying to make was that if he/she spends $3K - $5K to hire an attorney to draft and negotiate a purchase and sale agreement and that purchase and sale agreement was executed (signed) then he/she could expect to spend thousands on any contractual dispute that may arise. How much? IDK, but based on my very limited experience with hiring attorneys to draft purchase and sale agreements I could see it easily topping in excess of $5K. So now the OP has spent at least $8K - $10K (probably more) on a $35K asset. To me that doesn't seem like a very good value proposition. Now if we were talking about an $800K asset, like a Cirrus, then yeah, a few thousand to try and protect a purchaser maybe make sense assuming a mutually agreeable contract was drafted.

That said, I have heard that most light aircraft sales agreements are "AS IS". I know mine was and when the day comes that I sell my aircraft that's the agreement I will sign. I would expect the buyer to want a thorough prebuy inspection and I think money is better spent on that. Once the attorneys are brought in no one wins except the attorneys...
 
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