Buying or selling an aircraft is an exciting endeavor, but the transaction process requires carefully documenting the exchange details through a bill of sale. An aircraft bill of sale formally transfers ownership and provides proof of the purchase or sale price. Having an accurate paperwork trail protects both buyer and seller in the event of disputes. While verbal agreements may suffice between trusted parties, a bill of sale adds an extra layer of legitimacy.
For expensive, high-liability assets like airplanes, a comprehensive bill of sale is strongly recommended. In this article, we’ll outline what should be included in an aircraft bill of sale and provide a free customizable template to craft one tailored to your transaction specifics. If you’re looking to buy or sell a plane, helicopter, or other aircraft, use this guide to ensure proper documentation.
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What is an Aircraft (Airplane) Bill of Sale?
An aircraft bill of sale is a legal document that proves the sale and transfer of ownership of an airplane, helicopter, or other aviation vehicle from one party to another. It provides details like the aircraft make, model, serial number, sale price, and identifies the buyer and seller.
An aircraft bill of sale serves as evidence the sale was completed and gives the new owner documentation to register the plane. It also protects the seller by showing the aircraft is no longer under their ownership. Essentially, an aircraft bill of sale formally documents the transaction and transfers liability.
Aircraft Bill of Sale Templates
An aircraft bill of sale is a document that formally transfers ownership of an airplane from the seller to the buyer. It serves as legal proof of the sale and purchase transaction.
The bill of sale contains identifying details about the aircraft like make, model, serial number, and registration number. It specifies the names and contact information for both the seller and purchaser. The sale date, purchase price and terms, condition of the aircraft, and any disclaimers should be included. Signatures of both parties are required on the document.
Overall, an aircraft bill of sale provides clear evidence that the seller relinquished all claims to the airplane and the buyer assumed ownership on the purchase date. It is an essential document required for registration of an aircraft with aviation authorities. The bill of sale also protects both parties by detailing the specific plane, price, and conditions agreed upon. It becomes part of the aircraft’s permanent record.
Why Do I Need an Aircraft Bill of Sale?
An aircraft bill of sale is a critical document in the process of buying or selling an aircraft, and its importance cannot be overstated for several reasons.
Firstly, the aircraft bill of sale serves as a legal record of the transaction, detailing the specifics of the sale, including the names of the buyer and seller, the agreed price, and the date of the transaction. This document is invaluable in situations where there may be disputes or disagreements about the details of the sale. It acts as a binding agreement that confirms that the ownership of the aircraft has been transferred from the seller to the buyer.
Secondly, for the buyer, having an aircraft bill of sale is often a requirement for registering the aircraft under their name. Much like registering a vehicle, authorities require proof of purchase to update the aircraft’s registration and reflect the new ownership. Without this document, a buyer might find it challenging, if not impossible, to demonstrate that they are the rightful owner of the aircraft, making it difficult to operate the plane legally.
Lastly, from a financial perspective, the bill of sale is also a crucial component for tax and insurance purposes. When reporting assets or determining the value of an estate, the document serves as proof of the aircraft’s value and the terms of its purchase. Furthermore, insurance companies may require a copy of the bill of sale to ensure the correct coverage and to process any potential future claims.
In summary, an aircraft bill of sale is not just a customary practice but a vital document that protects the interests of both the buyer and seller, facilitates the legal transfer of ownership, and has broader implications for taxation and insurance.
What Forms Do You Need to Sell an Aircraft?
Selling an aircraft involves a series of administrative procedures to ensure the correct transfer of ownership and adherence to safety and operational standards. The primary forms and their specific roles in this process are:
- Aircraft Bill of Sale (AC Form 8050-2):
- Purpose: This is the primary document that records the sale of the aircraft from the seller to the buyer. It includes critical information such as the names and addresses of the buyer and seller, the sale price, and the aircraft’s details (make, model, serial number).
- Usage: Both parties should keep copies of this form. The buyer needs it to show proof of purchase and to register the aircraft under their name.
- Aircraft Registration Application (AC Form 8050-1):
- Purpose: This form is used to apply for the registration of an aircraft in the U.S. or to update the details of the current registration. This form captures information about the aircraft’s ownership, liens, and encumbrances.
- Usage: The buyer fills out and submits this form to the Federal Aviation Administration (FAA) to register the aircraft under their name after the sale. Along with this application, the buyer will need to submit the Aircraft Bill of Sale (or evidence of ownership) and any applicable fees.
- Application for U.S. Airworthiness Certificate (AC Form 8050-3):
- Purpose: This form is utilized to request a new, renewed, or replacement airworthiness certificate. An airworthiness certificate signifies that the aircraft is in a condition suitable for safe operation. There are two types: Standard Airworthiness Certificates and Special Airworthiness Certificates.
- Usage: While the selling process itself doesn’t necessarily require this form, it’s pertinent if the aircraft’s current airworthiness certificate is expired or soon to expire. The new owner would want to ensure that the aircraft has a valid airworthiness certificate, which can influence the aircraft’s sale price and desirability.
In addition to the above forms, it’s also recommended that both parties keep detailed maintenance and repair records. The buyer will want to review these records to ensure the aircraft has been properly maintained and to anticipate any future maintenance needs. It is also a good practice to have a pre-purchase inspection conducted by an independent third party to ensure the aircraft is in the condition represented by the seller.
How to Sell an Airplane
Selling an airplane is a comprehensive process, involving not just the transfer of a valuable asset but also complying with regulations and ensuring safety. Here’s a detailed step-by-step guide to help you navigate this task:
Step 1: Determine the Market Value
Before listing your aircraft, research its current market value. Consider factors such as age, model, maintenance history, upgrades, and overall condition. Websites like VREF or Aircraft Bluebook can provide ballpark figures. For a more precise valuation, consider hiring an aircraft appraiser.
Example: Bob, wanting to sell his 1990 Cessna 172, first checks online resxources to get an estimate. Finding a range of prices, he hires an appraiser who assesses the aircraft’s unique features, wear, and tear, resulting in a more accurate listing price.
Step 2: Prepare the Aircraft
First impressions count. Ensure the airplane is clean inside and out. Address any minor repairs or cosmetic issues. Having the aircraft detailed professionally can enhance its appeal. Additionally, gather and organize all maintenance and service records, as potential buyers will likely want to review them.
Example: Bob decides to get his Cessna professionally cleaned, touching up some minor paint chipping. He organizes all the service records chronologically, highlighting recent major repairs or upgrades.
Step 3: Advertise
List your aircraft on reputable aviation marketplaces such as Controller, Trade-A-Plane, or even general platforms like eBay. Include high-quality photos from multiple angles and a detailed description, highlighting unique features or recent upgrades. If possible, also share videos showcasing the plane’s performance.
Example: Bob lists his Cessna on Trade-A-Plane, adding photos of both the exterior and interior. He mentions the recent engine overhaul and avionics upgrade, knowing these will attract buyers.
Step 4: Engage with Potential Buyers
Respond promptly to inquiries. Arrange viewings or test flights while ensuring all safety protocols are met. During interactions, be transparent about the aircraft’s history and any quirks or issues it may have.
Example: A buyer named Alice contacts Bob showing interest. Bob arranges a viewing and is upfront about a minor radio issue, ensuring Alice appreciates the honesty.
Step 5: Negotiate and Finalize the Sale
Once a buyer shows genuine interest, be prepared to negotiate. Once both parties agree on a price, draft a sales agreement detailing the terms of the sale. This should include the sale price, deposit amount, and any conditions or contingencies. Collect a deposit to secure the sale.
Example: Alice offers a price slightly lower than Bob’s listing. After some negotiation, they agree on a middle ground. Bob drafts a sales agreement, and Alice provides a 10% deposit.
Step 6: Handle the Paperwork
Complete the Aircraft Bill of Sale (AC Form 8050-2) and ensure the buyer fills out the Aircraft Registration Application (AC Form 8050-1). Provide the buyer with all maintenance records, manuals, and any other pertinent documentation.
Example: Bob provides Alice with two copies of the Bill of Sale, both signed by them. He hands over the maintenance logs and reminds Alice to submit the Registration Application to the FAA.
Step 7: Finalize Payment and Transfer
Once all paperwork is in order and the buyer has secured financing or payment, finalize the transaction. Transfer the aircraft keys, logbooks, and any other essentials to the buyer. Ensure you receive the full payment before this transfer.
Example: Alice secures financing and pays Bob the outstanding amount. Bob hands over the keys, logbooks, and wishes Alice many safe flights.
Step 8: Notify Relevant Authorities
Inform the FAA about the sale by sending them a notice. This ensures you’re not held responsible for any future liabilities related to the aircraft.
Example: Bob sends a letter to the FAA, notifying them of the sale, ensuring he’s no longer the registered owner in their records.
How to Write an Aircraft Bill of Sale
An Aircraft Bill of Sale is a crucial legal document for the sale of an aircraft. It certifies the transfer of ownership from the seller to the buyer. Writing an effective and comprehensive bill of sale is essential to avoid future disputes and ensure a smooth transaction. Here’s a step-by-step guide to help you craft this document:
Step 1: Start with Basic Information
Begin the document by clearly indicating that it’s an “Aircraft Bill of Sale.” Ensure you include the date of the transaction and the full names and addresses of both the seller and the buyer.
Example: The document can start with “This Aircraft Bill of Sale, dated [Date], is made between [Seller’s Full Name] of [Seller’s Address] (hereinafter referred to as ‘Seller’) and [Buyer’s Full Name] of [Buyer’s Address] (hereinafter referred to as ‘Buyer’).”
Step 2: Detail the Aircraft Information
Clearly list the essential details of the aircraft. This should include the make, model, serial number, registration number, and year of manufacture. Additionally, mention any major components or upgrades that are part of the sale.
Example: “The aircraft being sold is a 1985 Cessna 152, Serial Number XYZ12345, Registration Number N12345. Included in this sale are newly upgraded avionics and a recently overhauled engine.”
Step 3: Specify the Sale Price and Payment Terms
State the total purchase price of the aircraft in words and numbers. Detail how the payment will be made – whether in lump sum, installments, or via other agreed terms. Specify the currency, especially if dealing internationally.
Example: “The total purchase price of the aircraft is Twenty-Five Thousand Dollars ($25,000). The Buyer shall pay this sum in a lump sum upon signing this Bill of Sale.”
Step 4: Add Warranty Information
Clarify whether the aircraft is being sold “as is” or if there’s a warranty attached. If the latter, specify the warranty terms, including its duration and what it covers.
Example: “The aircraft is sold ‘as is,’ without any warranties of any kind, either expressed or implied by the Seller, including, but not limited to, warranties of title, airworthiness, or fitness for a particular purpose.”
Step 5: Address Liens and Encumbrances
Declare that the aircraft is free from any liens, encumbrances, or outstanding claims, unless otherwise specified. If there are any, list them in detail.
Example: “The Seller warrants that the aircraft is free and clear of any liens and encumbrances, with the exception of a lien by ABC Bank amounting to $5,000, which the Seller agrees to settle upon completion of this sale.”
Step 6: Include Signatures and Notarization (if applicable)
At the bottom of the document, provide spaces for both the seller and buyer to sign and date. Depending on jurisdiction or the preference of the parties, the signatures might need to be witnessed or notarized.
Example: Below the main body of the document, there should be a section labeled “Acknowledged and Agreed” with spaces for “Seller’s Signature,” “Date,” “Buyer’s Signature,” and “Date.” If notarization is required, ensure a section is provided for the notary’s stamp, signature, and date.
Step 7: Keep Multiple Copies
Once signed, both the seller and buyer should keep copies of the Bill of Sale for their records. It’s also wise to make digital backups if possible.
Example: After signing the document in the presence of a notary, Bob (the seller) provides Alice (the buyer) with two copies and keeps two for himself. They both store a digital scanned version on their computers.
Completing an aircraft transaction involves more than just an exchange of money—proper documentation is critical. A comprehensive aircraft bill of sale protects buyer and seller by recording key details like the plane identification, parties involved, sale terms, and date of transfer.
While verbal agreements may occur, having a signed bill of sale adds legitimacy and evidence in case disputes arise. If you are looking to buy or sell an aircraft, use our free customizable airplane bill of sale template to accurately document the transaction. Simply input your aircraft specifics, buyer/seller info, sale price and terms, and sign to make it official. With this bill of sale template, you can ensure your aircraft transaction is properly recorded.
Where can I get the official Aircraft Bill of Sale form?
In the U.S., the Federal Aviation Administration (FAA) provides the official Aircraft Bill of Sale form, known as AC Form 8050-2. It can be obtained from the FAA’s official website or local FAA offices.
Do I need to notarize the Aircraft Bill of Sale?
Notarization requirements can vary depending on local and state regulations. While the FAA does not mandate notarization for the AC Form 8050-2, some states or buyers/sellers might prefer it for added legal security. It’s best to consult local regulations or an aviation attorney.
What happens if I don’t register the change of ownership with the FAA?
Failure to register the change of ownership can lead to potential legal complications. The previous owner may still be held liable for any incidents or issues related to the aircraft. It’s crucial to register the sale to ensure a clear transfer of responsibilities and liabilities.
Can I use the Aircraft Bill of Sale for international sales?
While the FAA’s AC Form 8050-2 is specific to the U.S., the basic premise of an Aircraft Bill of Sale is universal. For international sales, both parties should be aware of each country’s specific regulations and requirements. It might be necessary to draft a custom bill of sale that complies with both countries’ standards.
What if there are liens or debts on the aircraft?
All liens or encumbrances should be declared in the Bill of Sale. Typically, the seller is responsible for settling any outstanding debts before or upon completion of the sale. Clear communication between both parties is essential to address any financial obligations.
Can I sell an aircraft “as is”?
Yes, aircraft can be sold “as is”, meaning the buyer accepts the aircraft in its current condition without any warranties from the seller. It’s essential to clearly specify this in the Bill of Sale to avoid future disputes.