Getting Started with Kit Aircraft: Liability and Selling a Completed Aircraft
Liability and selling a completed aircraft. This question always comes up at forums we conduct on homebuilt aircraft.
If you are considering building a new homebuilt aircraft from a kit — or are thinking of buying someone’s completed homebuilt—this series maybe the most valuable hobby-related information you will ever read. That is because the hobby of building and flying your own full-size aircraft is likely to be a highlight of your life. Thousands of builder/pilots report that the process ranges from exhilarating to daunting, and at times from exciting to discouraging. But those who finish and fly their own aircraft know a satisfaction impossible to describe in words.
The commitment of time, money and work space dictates a dedication seen in few hobbies. Yet if the only goal is ownership of a custom aircraft, building will be drudgery and the chance of completion is reduced. Most homebuilders, however, know before they begin that they like building things, and others discover it early in the process. For most, working with their hands on a fascinating project is at least half of the fun. And some find to their amazement that they like building even more than they like flying. Members of this group find themselves flying the new creation for a while, then selling it to finance another build-it-yourself aircraft.
Our objective in this series, however, is to tackle some of the issues that should be addressed before investing serious time or money. Here is the list of topics:
- Deciding whether to build
- How to pick a design
- Choosing the right kit company
- Getting help and keeping it legal
- Licensing the aircraft
- Flight testing
- Getting insurance
- Liability and selling a completed aircraft
- Staying married
Liability and selling an completed aircraft
Liability and selling a completed aircraft. This question always comes up at forums we conduct on homebuilt aircraft. Statistical evidence, however, indicates that individual homebuilders have little chance of being sued by subsequent owners or heirs. Yet a few hair-raising expectations stand out. One example is the suit of the builder of the late John Denver’s Long-EZ, who modified the fuel valve from the system in the plans. His objective, he thought, was to improve safety.
- The builder, not the kit purveyor, is the manufacturer, according to the FAA. And that raises the specter of product liability lawsuits, remote as they might be. Only the jury knows for sure. But there are ways to protect yourself.
- Pick your buyer. This may be the best of all possible ways to reduce liability: Sell only to someone you know is well qualified to fly the aircraft you have built. Require that the buyer select, hire and pay for an aircraft mechanic to inspect your airplane, and that you receive a copy of the written report. Do not volunteer to find a mechanic; the buyer must do it.
- Get the buyer and spouse to sign a hold-harmless agreement. Everyone agrees that these are worthless if a case should come to trial (because people can not sign away their rights), but such a document might be of some value in pretrial proceedings.
- Keep copies of all aircraft documentation including plans, building logs and photos and FAA paperwork. That is to help prove that the aircraft was built according to known standards.
- Novel twists. Some experts have recommended that the seller require the buyer to acquire insurance that lists the seller as an insured party. Check with your attorney on that move and others that may have various implications depending on location.
- Deep pockets. Finally, realize that unless you have considerable assets worth going after, chances are slim of getting sued in the first place. Attorneys are generally not interested in small settlements.
