Would a real estate agent taking potential clients on an “aerial tour” of available properties be incidental to business? Assume that the pilot has his private rotorcraft certificate and is using a helicopter for the tours. The properties are in an upscale resort area, not somewhere that you might need an aircraft to check out a huge ranch or farm.
Incidental to Business?
- Thread starter Wheels
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Is the pilot being reimbursed at all for the flight?
Fearless Tower
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I think that is the key. What happens if the potential clients don’t buy? Do they get billed for the flight?
Well, being Part 91 doesn't necessarily mean the operation can be conducted with a private certificate.
I don't believe it's as clear cut as you're making it. As Fearless mentioned, how compensation occurs is of importance.
Are people going to use this realtor because this service is included? Does the realtor "hold out" this service?
Do the clients pay for the service or reimburse it fully?
Under (b), passengers can't be carried.
Under (c), the pilot must pay pro rata costs.
Personally, I'd spend some time with a good aviation lawyer before I tried something like that with a private pilot certificate.
(b) A private pilot may, for compensation or hire, act as pilot in command of an aircraft in connection with any business or employment if:
(1) The flight is only incidental to that business or employment; and
(2) The aircraft does not carry passengers or property for compensation or hire.
(c) A private pilot may not pay less than the pro rata share of the operating expenses of a flight with passengers, provided the expenses involve only fuel, oil, airport expenditures, or rental fees.
paflyer
Final Approach
If there's no charge or obligation,why wouldn't it just be a private, part 91 flight?
The FAA has previously found that goodwill in the form of expected future economic benefit could be considered compensation. Wouldn’t the expectation that he will benefit from getting property sales that he would not get without offering the flights meet that definition of compensation?
flyingcheesehead
Touchdown! Greaser!
1, that ad is clearly "holding out."
2, if you're offering aerial tours it's most certainly not "incidental to the business." You cannot give an aerial tour without an aircraft.
I would expect that the FAA would put this guy on the ground for at least 90 days if they caught up with him...
Clip4
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(a) Except as provided in paragraphs (b) through (h) of this section, no person who holds a private pilot certificate may act as pilot in command of an aircraft that is carrying passengers or property for compensation or hire; nor may that person, for compensation or hire, act as pilot in command of an aircraft.
b) A private pilot may, for compensation or hire, act as pilot in command of an aircraft in connection with any business or employment if:
(1) The flight is only incidental to that business or employment; and
(2) The aircraft does not carry passengers or property for compensation or hire.
A salary or sales commission is compensation, you are hauling passengers. It is prohibited.
b) A private pilot may, for compensation or hire, act as pilot in command of an aircraft in connection with any business or employment if:
(1) The flight is only incidental to that business or employment; and
(2) The aircraft does not carry passengers or property for compensation or hire.
A salary or sales commission is compensation, you are hauling passengers. It is prohibited.
The weakness in your argument is that his ad explicitly states that the flights are being offered specifically to people who are looking for real estate, which ties it into the "incidental to business" exception. I don't think this is clear-cut enough that we "jail-house lawyers" are going to be able to figure it out.
flyingcheesehead
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The question that answers the "incidental to the business" question is, "Can I do the same thing without an aircraft?" For example, if you have to go to a meeting, flying there is incidental to the business because you could drive there too. But you can't give an "aerial tour" without an aircraft. It's about as open-and-shut as this sort of case gets.
Nope. You can sell real estate without giving air tours.
James331
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James331
When you advertise like that, yeah, that’s going to be asking for trouble
Now some Relator who doesn’t highlight it, doesn’t make it the center point of his marketing, doesn’t charge if you don’t buy the place, I’d wager you’ll be ok.
flyingcheesehead
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True, but if you're advertising the aerial tours as part of the reason you should go with that realtor, you've gone way across the line. I think @James331 is right on in the post above.
timwinters
Ejection Handle Pulled
The real answer:
Who cares. The entire FAA organization is going to be busy investigating Bryan for years so no one will notice.
Who cares. The entire FAA organization is going to be busy investigating Bryan for years so no one will notice.
I was thinking that maybe Bryan could use this information as a bargaining chip. In order to get himself out of trouble he can become a confidential informant and start snitching on other people.
Consider that the transportation of business guests is specifically permitted
As a business model, I'd get an opinion from someone who knows.
Not an opinion on the final result: There are not a lot of examples out there and it's one those things which is pretty vague, but this could be a great example of "good will" compensation. "I give you a tour as a way of inducing you to purchase properties from me." If it is considered that way, it would violate the second half of the "incidental to business" exception in 61.113, "The aircraft does not carry passengers or property for compensation or hire."
As a business model, I'd get an opinion from someone who knows.
It’s hard to see how you could justify the cost if there is no return of some sort. It ain’t “incidental” for most people to fly an R-44 around for a few hours.
Also, I don’t see how an aerial tour could be considered incidental. Certainly not if you don’t land at the property to see it in a non-aerial fashion. If you land and tour the property in a normal fashion, well it gets harder to say, but I still think you can’t justify that cost difference as “incidental” compared to driving out in a car. The only reason you’d pay the expenses of a helicopter in this scenario is for it’s ability to perform an aerial tour, which makes it not incidental.
Also, I don’t see how an aerial tour could be considered incidental. Certainly not if you don’t land at the property to see it in a non-aerial fashion. If you land and tour the property in a normal fashion, well it gets harder to say, but I still think you can’t justify that cost difference as “incidental” compared to driving out in a car. The only reason you’d pay the expenses of a helicopter in this scenario is for it’s ability to perform an aerial tour, which makes it not incidental.
dtuuri
Final Approach
So what are "you" touring, the real estate or Disney World?
Fearless Tower
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That's just one FSDO with a light work load….
alfadog
Final Approach
I don't know any more about this subject than any other pilot here so I might as well chime in.
I see him as clearly holding out an aerial tour for compensation. With that ad, he is hoping that qualified buyers will choose him over a realtor that cannot offer them that high-end luxury experience. The compensation being, at best, a healthy commission on a luxury property and, at worst, goodwill with a high-end clientele.
I do not see the flying as incidental to what he is doing in that ad, I see it as the very heart of what he is doing.
I see him as clearly holding out an aerial tour for compensation. With that ad, he is hoping that qualified buyers will choose him over a realtor that cannot offer them that high-end luxury experience. The compensation being, at best, a healthy commission on a luxury property and, at worst, goodwill with a high-end clientele.
I do not see the flying as incidental to what he is doing in that ad, I see it as the very heart of what he is doing.
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I think you have adequately stated the issues. Even if he paid a lawyer, no one who is worth hiring will tell him anything more specific than he can read in this thread, and he sure as heck won't get a guarantee. If you are risk averse, I would go to FSDO and tell them I want to comply with the rules, so what do you think of my operation, and what if anything do I need to change to be ok? If I am a risk taker, I proceed ahead and hope I don't get investigated.
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Bob Gardner
A long time ago I sold real estate. I took potential buyers around to various properties in my own car. No one else bought my gas or paid for my insurance/maintenance. My hope, as is the case with most commission-based selling, was that a sale would compensate me for the car expenses over time. If I had owned my own plane and had flown potential buyers to view a property I would have expected the same result.
Bob
Did you put on your advertising that you’d be their chauffeur during their house hunting?
Stewartb
Final Approach
I'd be equally concerned about insurance.
bflynn
Final Approach
Ahhh no. The salary or commission does not require the flight. The flight is therefore incidental.
Too few people understand what "incidental" means. Probably because the FAA has messed up the meaning "compensation" so badly.
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Bob Gardner
Have you ever read a real estate listing? Did you interpret a listing as any kind of guarantee as to how a prospective purchaser would get to the property without being taken there by a salesperson? I honestly never though of a listing as being an advertisement of personal services...because the sales person has access to the property (key box, etc) and the prospective purchaser does not, transportation is a given. That's why you don't see many Mini's or SmartCars in real estate agent's parking lots....more like Lexuses, Caddies, etc.
Bob
You didn't expense your mileage?
You made my point. Transportation in a car is incidental to your business. You didn’t even advertise it because it’s assumed. A helicopter is certainly not, and putting it on the ad makes that even more obvious, as you stated you don’t advertise your car.
MauleSkinner
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There are a lot of variables in the question.
Who is providing the aircraft and/or who is paying for it (individual realtor vs the real estate office...I’m assuming the buyers are not being directly charged for the aircraft time).
whether or not they land on the propertty could define whether it was “an airplane ride” or “providing transportation”.
I would say the ad above is advertising helicopter rides more than real estate services.
But I don’t enforce the rules, so my opinion probably doesn’t matter.
Who is providing the aircraft and/or who is paying for it (individual realtor vs the real estate office...I’m assuming the buyers are not being directly charged for the aircraft time).
whether or not they land on the propertty could define whether it was “an airplane ride” or “providing transportation”.
I would say the ad above is advertising helicopter rides more than real estate services.
But I don’t enforce the rules, so my opinion probably doesn’t matter.
The first sentence of paragraph b) says that a private pilot is allowed to fly for compensation or hire under the conditions described, so the mere existence of compensation is not enough to make it a violation. The real issue is whether conditions (1) and (2) are met. My amateur analysis would be as follows:
(1) With regard to whether the flight is only incidental to the business or employment, the crucial question in my mind is whether the pilot is getting paid to fly, or getting paid to sell real estate. I'm guessing that the pilot in this case is self-employed, and that if the passenger doesn't buy any real estate, then the pilot doesn't get paid, so I would say that the "incidental" test would be met, especially considering that the cost of the flight is insignificant compared to the cost of the real estate being sold.
(2) This clause refers to the "aircraft" carrying passengers or property for hire, as opposed to the "pilot" doing so in the opening sentence of paragraph (b). This is a little confusing, but in other contexts, I believe that this type of wording is intended to distinguish between the pilot receiving compensation for the flight, vs. someone else receiving compensation for the flight. Here again, if no money changes hands other than the sale of real estate, if any, then I would say that the compensation is for the real estate, not the flight.
As for the holding-out issue, I have no idea how that would factor in.
Not that I have any idea what I'm talking about anyway, since I'm just an amateur kibbitzer.
paflyer
Final Approach
Comparative cost is not a factor in determining whether use of an aircraft is incidental or not.
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Bob Gardner
Let's not let the obviously illegal helicopter ad distract us from the origin of this thread.
Bob
That ad is the origin of this thread. I received the ad and then created this thread to ask about it.
MauleSkinner
Touchdown! Greaser!
Where did you get the assumption that he was a private pilot trying to make this incidental to business?
I looked up the name in the FAA airman database. I realize that it might not be completely up to date but it indicates that he is a private pilot.