Experimantal Amateur Built in Clubs?

[Windknot]

Is there anything prohibiting an established flying club from buying an experimental/ amateur built airplane (Like a RansS6) and sharing it within the flying club?

I'm in a 60 member flying club - three total aircraft - a Cherokee for the PPL's, a tri-pacer and a T-Craft.

The Tri-pacer is for sale and should be sold shortly and I'm trying to encourage them to purchase a tricycle gear LSA eligible airplane , but the options for less expensive airplanes are limited when they have three big wheels.

Thoughts? Prohibitions?

[Daidalos]

Good question. I don't know the rules off-hand.

I believe the club would need to be in the form of a partnership rather than a club. Experimentals cannot be rented as far as I understand. So the way it is structured is critical.

Insurance requirements are a major consideration. With 5 people or less they can be named on the policy. There are many concerns, how will decisions be made, maintenance, unexpected costs and sale of shares?

I've been in a partnership and it's like a marriage, good or bad depending upon the partner!

With questions like this it is best to see a professional. You need an aviation lawyer and good accountant.

[Windknot]

Currently I'm in a club that owns three airplanes...no, two airplanes - I am a 1/60th equity owner in the club - I bought in for a fixed price. I pay dues annually ($300) that cover hangar upkeep, insurance and fixed costs - I also pay $28/hr DRY for hourly use of the T-Craft and pay for my own fuel used - the $28 covers the future maint. on the airplane.

Just wondering if you couldn't have a experimental/amateur built in the mix.

[Jack Tyler]

Wind knot, I suggest you ask your question to the club's insurance broker, asking him/her to get a firm answer from the underwriter. That will be the answer.

[Jack Tyler]

Sorry, dupe post...

[Helen]

Good question. I don't know the rules off-hand.

I believe the club would need to be in the form of a partnership rather than a club. Experimentals cannot be rented as far as I understand. So the way it is structured is critical.

Insurance requirements are a major consideration. With 5 people or less they can be named on the policy. There are many concerns, how will decisions be made, maintenance, unexpected costs and sale of shares?

I've been in a partnership and it's like a marriage, good or bad depending upon the partner!

A club is considered by the FAA to be a partnership rather than a business so rental is not an issue. It is perfectly legal to have an experimental airplane in a club.

Insurance is doable too. I know it is for a Searey at least and on the scale of things to insure, that's on the hard end. I'd think something like a Rans would be fairly easy.

As for the marriage thing, unlike a partnership, clubs have bi-laws. Think of it s a prenuptial agreement. That tends to make things go much smoother.

Helen

[Jack Tyler]

Re: insurance, I think the issue isn't whether some kind of coverage can be made available for some kind of experimental owned by some Club. Rather, the issue is whether that club's underwriter will cover the specific experimental a/c being considered for purchase, and the requirements for that specific coverage.

Partnerships and Clubs can have written rules, bylaws, procedures et al. in equal measure. There is no limit on how a Partnership is structured and the obligations the partners assume, just as is true with a Club and its rules (perhaps defined in the charter as By-Laws). Clubs are different in other respects, e.g. their obligation for IRS reporting. Re: "rules", one of the best things about a Partnership is that it's usually relatively easy to modify the terms of the Agreement since only a few people are involved.

[Windknot]

Good question. I don't know the rules off-hand.

I believe the club would need to be in the form of a partnership rather than a club. Experimentals cannot be rented as far as I understand. So the way it is structured is critical.

Insurance requirements are a major consideration. With 5 people or less they can be named on the policy. There are many concerns, how will decisions be made, maintenance, unexpected costs and sale of shares?

I've been in a partnership and it's like a marriage, good or bad depending upon the partner!

A club is considered by the FAA to be a partnership rather than a business so rental is not an issue. It is perfectly legal to have an experimental airplane in a club.

Insurance is doable too. I know it is for a Searey at least and on the scale of things to insure, that's on the hard end. I'd think something like a Rans would be fairly easy.

As for the marriage thing, unlike a partnership, clubs have bi-laws. Think of it s a prenuptial agreement. That tends to make things go much smoother.

Helen

Great answer Helen - that was the kind of feedback I was looking for.

I'll discuss it with my Falcon Insurance Broker - I was absolutely FLOORED at the difference in insurance costs between the EAA's brokers and say...AOPA's - in regards to insuring Experimental/Amateur built for MY use - 80% cheaper that the AOPA guys.

I'm not looking to start a club tomorrow, but the recurring theme here continually is "there is a LACK of LSA planes available for training." So if there is a CLUB that has E/A Built LSA's that a MEMBER OF THE CLUB can use for LSA flight and LSA Training, it would simply be a matter of aligning CFI's who do Light sport with the club.