Experimentals for hire?

[Stolpilot]

Good day folks. I'm new here and I am researching a controversial topic.

I refer only to experimental amateur built aircraft issued a Certificate under part 21.191 (g)

Can you rent an aircraft issued an E-AB certificate if not can you direct me to the prohibiting part and para?
Please note I don't mean renting for training but renting for someone to make a recreational flight.

[Sam Buchanan]

Good day folks. I'm new here and I am researching a controversial topic.

I refer only to experimental amateur built aircraft issued a Certificate under part 21.191 (g)

Can you rent an aircraft issued an E-AB certificate if not can you direct me to the prohibiting part and para?
Please note I don't mean renting for training but renting for someone to make a recreational flight.

The following are quotes from an article on the EAA website (http://www.eaa.org/experimenter/articles/2011-01_darside.asp). No controversy here, these restrictions are well-established.

The specific section of Part 91 that deals with experimental aircraft operating limitations is 14 CFR 91.319, titled Aircraft having experimental certificates: Operating limitations.Right at the beginning of this regulation you’ll find the following:
(a) No person may operate an aircraft that has an experimental certificate –
(1) For other than the purpose for which the certificate was issued; or
(2) Carrying persons or property for compensation or hire.


Regardless of what type of experimental certificate the aircraft holds, be it amateur-built, experimental light-sport aircraft, exhibition, or what have you, the operating limitations will contain the following verbiage:
No person may operate this aircraft for carrying persons or property for compensation or hire.

[Stolpilot]

The following are quotes from an article in Sport Aviation:

The specific section of Part 91 that deals with experimental aircraft operating limitations is 14 CFR 91.319, titled Aircraft having experimental certificates: Operating limitations.Right at the beginning of this regulation you’ll find the following:
(a) No person may operate an aircraft that has an experimental certificate –

(1) For other than the purpose for which the certificate was issued; or
(2) Carrying persons or property for compensation or hire.


Regardless of what type of experimental certificate the aircraft holds, be it amateur-built, experimental light-sport aircraft, exhibition, or what have you, the operating limitations will contain the following verbiage:
No person may operate this aircraft for carrying persons or property for compensation or hire.




Ok but are you saying that renting and aircraft to a pilot is "carrying persons for compensation or hire" because it isn't. And secondly the certificate is issued for recreation and education and I asked if you can rent an E-AB to someone for recreational purposes

[Sam Buchanan]

Ok but are you saying that renting and aircraft to a pilot is "carrying persons for compensation or hire" because it isn't. And secondly the certificate is issued for recreation and education and I asked if you can rent an E-AB to someone for recreational purposes

The answer is NO. You can argue this point all you want with the FAA (and insurance carriers) but you will lose the argument. :)

[Stolpilot]

I'm not even sure what point I'm arguing. 319 is clear, "You cannot OPERATE an EAB for purposes other than recreation and education (certificated purpose) or for carrying persons or cargo for compensation or hire." UNDERSTOOD

Renting the aircraft is not operating aircraft. Or are you saying it is?

So what i am trying to find is the part and para the prohibits renting aircraft to someone for his or her recreation and not operating against what is stated In 91.319 (a) (1&2).

[Sam Buchanan]

I'm not even sure what point I'm arguing. 319 is clear, "You cannot OPERATE an EAB for purposes other than recreation and education (certificated purpose) or for carrying persons or cargo for compensation or hire." UNDERSTOOD

Renting the aircraft is not operating aircraft. Or are you saying it is?

So what i am trying to find is the part and para the prohibits renting aircraft to someone for his or her recreation and not operating against what is stated In 91.319 (a) (1&2).

I'm having a bit of trouble following your line of discussion, but are you are inquiring about merely renting an aircraft with no intention of anyone flying it? If so, I suppose this wouldn't be a violation of FARs since no aviating would be involved.......kinda wondering what kind of "recreation" you have in mind..... :eek:

[Stolpilot]

Carrying persons for compensation or hire could be common carriage or private carriage it involves physically transporting persons or cargo from one point to the next for some kind of payment. FAA says it does t have to be money, it could be hours etc. Common carriage would involve holding out the public.

Renting is neither common or private carriage. So 91.319 (a) (2) does not apply to my question.

So Mr Joe Public wishes to use my plane, he is the pilot, and he is going on his own recreational flight (by himself), can I accept money for that. Keep in mind I am not carrying him, he is going on his own, he has operational control of the aircraft during the rental agreement.

Is there a rule that prohibits that?

[Sam Buchanan]

Carrying persons for compensation or hire could be common carriage or private carriage it involves physically transporting persons or cargo from one point to the next for some kind of payment. FAA says it does t have to be money, it could be hours etc. Common carriage would involve holding out the public.

Renting is neither common or private carriage. So 91.319 (a) (2) does not apply to my question.

So Mr Joe Public wishes to use my plane, he is the pilot, and he is going on his own recreational flight (by himself), can I accept money for that. Keep in mind I am not carrying him, he is going on his own, he has operational control of the aircraft during the rental agreement.

Is there a rule that prohibits that?

Yes. Aircraft with an experimental airworthiness certificate cannot be used for commercial purposes. If you accept payment for the use of the plane (regardless of how it is used or by whom) that is considered a commercial use of the aircraft (renting).

You can allow your friend to fly your aircraft and he can purchase fuel to top it up when he returns but he cannot pay you for the use of the plane.

[Stolpilot]

Can you direct me to that rule?

[Sam Buchanan]

Can you direct me to that rule?

I did in my first reply.

[Stolpilot]

91.319 (a) (1&2) governs all aircraft issued an experimental certificate.

It says you cannot Operate the aircraft for
1. purposes other than what it is defined on your certificate "recreation and education"
2. For carrying persons or cargo for compensation or hire.

Fact.....
Therefore I cannot accept money or any compensation to perform a training flight. Contravenes 91.319 (a) 1
And I cannot fly mail from one airport to the next for money. Contravenes 91.319 (a) 2.

Renting is not operating. Renting is not carrying person or cargo for compensation or hire. Renting does not contravene "recreation or education". If someone accepts money to pilot the aircraft then I see a problem. If someone uses the aircraft for something other than recreation, I see a problem.

I will add this too, if you read further down, the FAA prohibits leasing (renting) LSA. LSA also have an experimental certificate. So wouldn't it been redundant to add the rule if (by your argument) 91.319 (a) took care of that.

So that's why I ask if there is a rule similar to 91.319 (f) that prohibits leasing or renting an experimental.

[Stolpilot]

Ok I was using the wrong term here I should have used the word lease instead of rent

Can I dry lease an experimental amateur built aircraft to someone for their own recreational purpose (flying over the Everglades for example).

I know you cannot do it with a LSA due to 91.319 (f). But is there something similar for EABs

[rwanttaja]

Ok I was using the wrong term here I should have used the word lease instead of rent

Can I dry lease an experimental amateur built aircraft to someone for their own recreational purpose (flying over the Everglades for example).

I know you cannot do it with a LSA due to 91.319 (f). But is there something similar for EABs
The problem is, if you ask *us*, all you're going to get is opinions. If there's something specific you want to do, you'd best speak to the FAA.

Besides, asking for a quote for specific regulations that prohibit that activity is not want you want. You want regulations or ACs that apparently permit leasing homebuilts. The FAA has always interpreted the regulations as prohibiting any commercial use of homebuilt aircraft. The FAA is allowed to issue waivers to allow renting homebuilts for transitional training, but even that's an iffy prospect. Unless you can point to something official that allows leasing the aircraft, they'll consider commercial use as outside the rules.

Ron Wanttaja

[Stolpilot]

The problem is, if you ask *us*, all you're going to get is opinions. If there's something specific you want to do, you'd best speak to the FAA.

Besides, asking for a quote for specific regulations that prohibit that activity is not want you want. You want regulations or ACs that apparently permit leasing homebuilts. The FAA has always interpreted the regulations as prohibiting any commercial use of homebuilt aircraft. The FAA is allowed to issue waivers to allow renting homebuilts for transitional training, but even that's an iffy prospect. Unless you can point to something official that allows leasing the aircraft, they'll consider commercial use as outside the rules.

Ron Wanttaja
Ok thanks. That puts it in perspective.

[1600vw]

How about a person starting a club with only EAB single seaters and having them available to the club members to fly. They pay a pay in fee, then monthly dues but can fly any of the single seat EAB the club owns.

I thought about doing this. Maybe buying 10 eab's single seaters and starting a club as this. Maybe even have a few ultralights for the low and slow days or lazy days.

Can this be done, and would you join such a club?

Fly Smart

[Stolpilot]

That's a good point. I also emailed the FAA asking about this issue, because the general rule is that I cannot rent an aircraft for flight training. The FAR prohibit that.

But there seems to be two opinions about renting for personal use. One is that's its commercial and a no no. The other is once you are properly rated and not using the aircraft to carry passengers for hire its ok.

The FAA defines leasing an aircraft Dry is non commercial.

Unlike light sport aircraft that has particular reasons it can be leased there seem to be no restrictions on E-AB except it cannot be used for flight training.

[WLIU]

What IS legal is 5 guys pooling their money and purchasing an E-AB as a partnership. Please note that for legal business purposed, a partnership and a "club" can be different. Not always, but can be. So this is where you start talking to a lawyer to make sure your ownership is set up correctly to avoid running afoul the the FAR's.

Now one challenge of the partnership may be how you buy in and sell out. That may require a bill of sale from the old partnership to the new partnership to change the list of names on the FAA records. But those mechanics are not expensive.

But we are talking about ONE airplane owned by multiple people. Each airplane would be a separate partnership, even if the paperwork was duplicated.

So if you have sent a formal inquiry to the FAA, I hope that it was addressed to the Office of the Chief Counsel. That is the only FAA organization that can issue an opinion that carries any weight. What you get from your local FSDO is the opinion of one inspector and that opinion does not carry any weight with any other inspector or the rest of the FAA. A letter from the Office of the Chief Counsel is actually a legal statement that the entire FAA must honor. The EAA and its divisions have obtained a few of these opinions over the years to clarify issues. An example is the United States Parachute Association asking the Chief Counsel whether skydivers are "passengers" as defined in the FAR's that prohibit formation flight during commercial passenger carrying operations. The official answer is "NO" and you will see formations of aircraft dropping skydivers. All of the local FSDO's must honor the Chief Counsel's declaration of the legality of that operation.

Hope this helps,

Wes
N78PS

[1600vw]

I do not mean to Hi-jack this thread and will start a new one if needed. But I have a couple questions.

What does the FAA allow. Club or Partnership?

[WLIU]

The FAA allows both so long as the ownership and operation conform to the FAR's. And that is likely the answer that you will get from your FSDO.

That said, a C-182, which is a Normal category aircraft, may be used for compensation or hire and can be owned and operated by either type of entity, as well as other categories of corporations, etc.

Since the original poster is poking into a corner of the FAR's that has likely not been fully explored, the nuances of how partnerships and clubs are formally organized and operated become important to the FAA. This may be one of the regulatory "coffin corners" of the flight envelope to make a bad comparison. Or as the older sci-fi fans might announce, "Danger Will Robinson!"

Best of luck,

Wes
N78PS

[rwanttaja]

How about a person starting a club with only EAB single seaters and having them available to the club members to fly. They pay a pay in fee, then monthly dues but can fly any of the single seat EAB the club owns.

I thought about doing this. Maybe buying 10 eab's single seaters and starting a club as this. Maybe even have a few ultralights for the low and slow days or lazy days.

Been there, done that. I was a member of a club that operated Pete Bowers' original Fly Baby as a club for ten years. We paid an initiation fee, monthly fees to cover hangar and insurance, and $5 an hour (dry). Happy times for ten years. Of course, I was the only guy paying dues or flying the airplane for much of that time. Pete retained ownership of the airplane, and the club ended when he sold it. Participants had to be members of Chapter 26 to join.

in the hangar next to us was the Story Special Flying Club, operating That airplane for nearly 50 years as a flying club. In their case, it was a co-ownership, with four memberships. By then end, around 1999, memberships were selling for $1500.

So a club is a way to do what you want. As long as you don't give the appearance of renting or leasing the airplane, you'll probably be fine.

Ron Wanttaja

[kscessnadriver]

You can allow your friend to fly your aircraft and he can purchase fuel to top it up when he returns but he cannot pay you for the use of the plane.

So then, let him pay a small fee to become a non-equity owner of the aircraft, and pay for the costs of using the aircraft that way.

[WLIU]

"Non-equity owner" sounds like a contradiction for an airplane. Your name is on the registration or it is not. If it is not, in the eyes of the FAA you are not an owner. Now for a Normal, Aerobatic, etc category aircraft, a company or partnership's name may be on the registration, and you may be a documented owner of that entity, but that means that there is a paper trail from you to the airplane's registration that the FAA can follow. And as with all things involving a governmental regulatory agency, its the paper trail that counts.

Best of luck,

Wes
N78PS

[SBaircraft]

The FAA has probably done legal interpretations for this exact scenario before. You can search for previous legal interpretations and opinions here: http://www.faa.gov/about/office_org/headquarters_offices/agc/pol_adjudication/agc200/interpretations/

[kscessnadriver]

"Non-equity owner" sounds like a contradiction for an airplane. Your name is on the registration or it is not. If it is not, in the eyes of the FAA you are not an owner. Now for a Normal, Aerobatic, etc category aircraft, a company or partnership's name may be on the registration, and you may be a documented owner of that entity, but that means that there is a paper trail from you to the airplane's registration that the FAA can follow. And as with all things involving a governmental regulatory agency, its the paper trail that counts.

Best of luck,

Wes
N78PS

So, put the airplane in a club. Club is the owner. You, the builder of the airplane, own the entire club, and sell memberships (owning a very, very small portion of the plane) to the club members, who can only sell it back to you or new members when they leave.

[Frank Giger]

Would this hypothetical person that would like to rent an Experimental be a friend or "some random dude?"

Close friend would simplify things. Just lend him the aircraft and have him top it off when he's done. Then, in an unrelated and very coincidental transaction, sell him a ballpoint pen for fifty bucks. Heck, put him on the insurance as a named pilot.

"Some random dude" = a business, and you're asking for BIG TROUBLE if it isn't legal all the way through; not that anybody would care until he wrecks the plane and the family sues you. See the FAA Counselor as suggested.

[WLIU]

So post #24 distills the question to ask the FAA Chief Counsel down to "Can a flying club, where one member holds a 90% interest and several other members hold small minority interests own and operate an E-AB aircraft with all members paying equal shares of the operating expenses." The answer to that question should be very interesting. I would not proceed with that scheme until I go an affirmative answer.

After all, its your pilot certificate at risk here. If the certificate is your livelihood, how will you explain to your wife if the FAA suspends it and you no longer have a paycheck? That question is one factor that shapes the behavior of most professional pilots.

Best of luck,

Wes
N78PS

[kscessnadriver]

After all, its your pilot certificate at risk here. If the certificate is your livelihood, how will you explain to your wife if the FAA suspends it and you no longer have a paycheck? That question is one factor that shapes the behavior of most professional pilots.


The question really comes down to, what would cause the FAA to find out about something like this between friends?

[Sam Buchanan]

The question really comes down to, what would cause the FAA to find out about something like this between friends?

An accident or insurance claim? Falsifying info in the course of a ramp check? Falsifying tax documents?

[WLIU]

As suggested above, you don't know if your friends are really your friends until something bad happens. And at that is when you find out if there is really "honor among thieves." Life really is easier if you try to follow the rules and avoid deals which look too good to be true.

But many people seem to have a need to skate around the edges and in truth many do not run into problems doing so.

But discussing the mechanics of skirting the FAR's is probably not a wise discussion to have on a public internet forum.

Best of luck,

Wes
N78PS

[wildhorsesracing]

Can a Club be a corporation? If so, then members would buy shares in the LLC and get equity. The club could have overhead expenses, ie. hangar rental, maintenance, rental manager's salary, etc. - wouldn't that be perfectly legal along the lines of EAB aircraft? There would be monthly dues to cover overhead costs and hourly dry rate based on expenses or a combination thereof?

[Bill Greenwood]

The regs usually prohibit experimental aircraft carrying passengers or freight for hire. So you can't be an airline or charter company.
But I don't think it prohibits you earning a fee or a pilot flying it for a fee.

Let's say you homebuild a new design acro plane, and it is a real whizbang worldbeater. You hire Patty Wagstaff to fly in it airshows, and the appearance fee might be $12,000 , split half between the pilot and half the builder.

Same for the Reno racers, many of which are experimental and some even amateur built. The top unlimiteds are often flown by some expert pilot, not necessarily the owner and may win hundreds of thousands of dollars.
An example of this was Rick Brickert flying the homebuilt experimental Pond Racer, which did not win anything, but would not have been illegal if they did. There was no passenger or freight being carried.

Some pilots may be flying for the challenge and fun of it, but many may be earning a fee also.

[Jim Hann]

Bill, I think you are mixing Experimental categories. None of the ones you cited except maybe Pond Racer were E-AB. Or maybe I'm wrong.

[Scooper]

Necro thread, I know, but all of the posts here occured before the FAA legal counsel interpretation in December, 2013. This interpretation is limited to renting ELSAs and SLSAs that have had their certification changed to experimental.

https://www.faa.gov/about/office_org/headquarters_offices/agc/practice_areas/regulations/interpretations/data/interps/2013/botsaris-botsaris&vance%20-%20(2013)%20legal%20interpretation.pdf (https://www.faa.gov/about/office_org/headquarters_offices/agc/practice_areas/regulations/interpretations/data/interps/2013/botsaris-botsaris&vance%20-%20(2013)%20legal%20interpretation.pdf)

[max_reason]

Since this "necro thread" renewal caught my attention, I'll extend the pain a bit to ask for comments on the following case that I saw in another forum.

I think he was an employee of the company in this case, but maybe not. He might have been providing this service to the company as an individual. If that changes anything, say so.

Anyway, for two or three years he was delivering products to customers. He would chuck products in the back of his truck and drive them to the customer who purchased them. I believe they had this arrangement because the products required certain handling (like never tilt the container more than 30 degrees in any direction), and this service is not available from conventional shippers like USPS, UPS, FedX, DHS, etc. But I doubt the reason matters. My memory says he was paid a fixed amount per mile based upon the number of miles a google search generated. I assume that is highway miles rather than straight line based upon what I see google generate from such searches.

About a year after he started this job (or arrangement/contract), he got his pilot certificate. Then he purchased an experimental airplane ("exhibition", as I recall, not amateur-built). When the weather was poor, he would drive the products in his truck as before. When the weather was good, he started flying the products to the destination in his airplane. Obviously he was never paid to fly the airplane, because he didn't even have an airplane for the first two or three years he was doing this. In fact, I think the company didn't even know for several months that he would sometimes fly their products to the destination.

The claim was ... this was perfectly okay. Apparently the basis for this conclusion was a case where someone asked the FAA if employees who were required to attend a convention as part of their job / employment (and given a fixed payment to cover expenses like air tickets, hotel, food, etc) could choose to fly to the destination in their own airplane. After all, they could also choose to drive to the destination, take a bus, or get to the destination in whatever way they chose. The point supposedly was, "they were not paid to fly in his own airplane, just get to and attend the convention" and therefore this no more constituted "commercial activity" than driving their own car or motorcycle.

Given this as the model case, the claim was that the delivery case is equivalent. Seems reasonable to me, but I'll bet someone out there will find a reason to disagree. Right? :-)

[skeeter_ca]

The flight would be for "compensation" which is not allowed. It is stated plain as day. The pilot is giving the owner money to fly the plane for recreation. He is compensating the owner for the use of the plane and the person being carried is the pilot. It doesn't have to be a passenger. There is wear and tear on the plane because it is being used. No if's and's or but's. Easy to understand.

[martymayes]

"he got his pilot certificate. Then he purchased an experimental airplane ("exhibition", as I recall, not amateur-built). When the weather was poor, he would drive the products in his truck as before. When the weather was good, he started flying the products to the destination in his airplane. Obviously he was never paid to fly the airplane"

Illegal in several areas. He was being paid to move a product from point A to point B. If you use a plane to do that it's called 'carrying property for compensation or hire.'
He needed an ATCO certificate, which could not be obtained with an experimental airplane of any kind; he needed to hold at least a commercial pilot certificate and meet the aeronautical experience requirements to be approved on the ATCO certificate.

"Apparently the basis for this conclusion was a case where someone asked the FAA if employees who were required to attend a convention as part of their job / employment (and given a fixed payment to cover expenses like air tickets, hotel, food, etc) could choose to fly to the destination in their own airplane. After all, they could also choose to drive to the destination, take a bus, or get to the destination in whatever way they chose. The point supposedly was, "they were not paid to fly in his own airplane, just get to and attend the convention"

Obviously, these two scenarios are not the same. The FAA employees are not carrying persons or property for compensation or hire on their trip. That is legit. Even a private pilot can fly his own plane to a business meeting in another town because the flying is only incidental.

If the FAA employee's neighbor said "Hey, you're going to Podunk tomorrow for that convention, right? I'll give ya $10 if you can deliver this feather to my brother" the flight would now be illegal if the FAA employee accepts.