Page 1 of 2

Renting out my sport plane?

Posted: Tue Jul 31, 2018 11:41 pm
by Hambone
I'm not sure if this is the right place to post, but here goes...

I'm (slowly) working through the academics towards my CFI-S. In the interim, am I allowed to rent out my CTSW? And, not yet being an instructor, am I allowed to give a checkout to a prospective renter who is a licensed pilot? And what are the insurance requirements?

Thanks in anticipation!

Re: Renting out my sport plane?

Posted: Wed Aug 01, 2018 8:40 am
by 3Dreaming
It will pretty much depend on your individual insurance policy. If the person is rated airplane single engine land, and is current there is no legal requirement for a check out. Your policy if rental is allowed may require a check out from a CFI. The policy will have all the details. If you still have questions call your insurance provider.

Re: Renting out my sport plane?

Posted: Wed Aug 01, 2018 12:38 pm
by Hambone
Thanks for that!

What if the renter has his own renter's insurance policy?

Re: Renting out my sport plane?

Posted: Wed Aug 01, 2018 12:53 pm
by 3Dreaming
Hambone wrote:Thanks for that!

What if the renter has his own renter's insurance policy?


The renter policy is to protect him, not you. Most personal aircraft policies I have seen prohibit commercial use. Renting would be commercial use. I would highly suggest that you talk to your insurance agent. They should know the ins and outs of your policy. If they don't, you really need to find a new agent.

Re: Renting out my sport plane?

Posted: Wed Aug 01, 2018 1:06 pm
by MrMorden
An insurance policy that will allow rentals will likely triple your rates. I know a local flight school paying $4000-6000 per year PER AIRPLANE.

Re: Renting out my sport plane?

Posted: Wed Aug 01, 2018 1:17 pm
by TimTaylor
IIRC, only an S-LSA can be rented out. You, as owner, would be held liable if the renter kills someone or even himself. A jury of your peers will decide. Under no circumstances would I ever rent out an airplane I owned.

Re: Renting out my sport plane?

Posted: Wed Aug 01, 2018 2:00 pm
by drseti
TimTaylor wrote: You, as owner, would be held liable if the renter kills someone or even himself. A jury of your peers will decide. Under no circumstances would I ever rent out an airplane I owned.


This is exactly why my plane is owned by my flight school, which is a Limited Liability Corporation (LLC).

Re: Renting out my sport plane?

Posted: Wed Aug 01, 2018 2:08 pm
by TimTaylor
drseti wrote:
TimTaylor wrote: You, as owner, would be held liable if the renter kills someone or even himself. A jury of your peers will decide. Under no circumstances would I ever rent out an airplane I owned.


This is exactly why my plane is owned by my flight school, which is a Limited Liability Corporation (LLC).

And that may or may not protect you. I hope you never have to find out.

Re: Renting out my sport plane?

Posted: Wed Aug 01, 2018 2:48 pm
by 3Dreaming
drseti wrote:
TimTaylor wrote: You, as owner, would be held liable if the renter kills someone or even himself. A jury of your peers will decide. Under no circumstances would I ever rent out an airplane I owned.


This is exactly why my plane is owned by my flight school, which is a Limited Liability Corporation (LLC).


Having a LLC might make you feel all warm and fuzzy, but does it really separate you from the liability? Unless you have a repair station that is a LLC, I figure signing off the condition inspection will throw the liability right back on you.

Re: Renting out my sport plane?

Posted: Thu Aug 02, 2018 10:53 am
by Hambone
So, renting to my students after they get their license sounds like a bad idea. The minimal potential income certainly doesn't seem to be worth the risk.

Perhaps I should have researched this earlier. I could have a CTSW for sale soon!

Re: Renting out my sport plane?

Posted: Thu Aug 02, 2018 12:36 pm
by TimTaylor
It's actually worse than that. How do you solo a student in an airplane you own? The insurance might be too expensive to make sense. If you're going to do it, become an expert on the rules of LLC's and make sure you follow them to the maximum extent possible to mitigate your risk as much as possible.

Re: Renting out my sport plane?

Posted: Thu Aug 02, 2018 6:27 pm
by FastEddieB
As a counterpoint, I have rented out several planes over the years: a Grumman AA5 and 2 Citabrias.

I incorporated as a Subchapter S in each case. I forget how much insurance was, but it was not prohibitive. It helped that I was a CFI and could check people out, especially important for renting a tailwheel aircraft.

The second Citabria ended on a sad note, involved in a dual fatal. Lost a bit on that, due to being slightly under-insured, but it paled compared to the human tragedy involved. The corporate shield did protect me and my partner from lawsuit, and the corporation had no assets beyond the plane, which was totaled.

Not saying to do it or not to do it. Just don't dismiss it out of hand.

Re: Renting out my sport plane?

Posted: Thu Aug 02, 2018 6:35 pm
by Hambone
Great advice from everyone.

Thanks!

Re: Renting out my sport plane?

Posted: Thu Aug 02, 2018 7:32 pm
by drseti
I do rent out my plane, to students for solo, as well as to my own graduates (only) for personal use. Renter pilots have to agree that active students get scheduling priority. Students have to agree that checkride scheduling takes precedence over lessons. I carry $1M liability insurance, $105k hull, $1k deductible, for a premium of around $5000/yr. My insurance is through Falcon, the EAA insurance agency, which is one of the few that offers commercial insurance for SLSAs. And yes, I agree that the LLC provides only partial protection -- but between it and my insurance, the most I have to lose is my flight school's assets; my personal ones are somewhat sheltered. And as far as my maintenance shop is concerned, it is part of the LLC, so the worst that can happen in the event of a lawsuit is that the plaintiffs might end up owning a flight school (which has limited market value without me to run it).

Re: Renting out my sport plane?

Posted: Thu Aug 02, 2018 7:53 pm
by TimTaylor
Your LLC may or may not shelter you and your personal assets from liability.