by Boatguy » Mon Jan 02, 2023 3:18 am
DiamondShare through Lifestyle, or a private bulk lease of hours done privately, are pretty much the same and neither is a partnership in any sense. Unlike a partnership, the original airplane owner is the owner; period. You are not sharing equity ownership, which renders moot most of the questions raised; though they would be relevant in a shared equity partnership. The lessees are customers who live within the rules of the lease agreement. The answers to most of those questions are up to the owner by virtue of how they draft the lease agreement. If you use the Lifestyle arrangement, then the rules are as they have defined. If you setup the same arrangement for yourself, you have a blank piece of paper and write the rules anyway you wish.
When I bulk leased hours on my DA40NG, I set down the rules to those questions in advance. So yes, you need to think through lots of situations and define them, as is the situation with any contract. As the owner, you make the rules. That is entirely unambiguous.
But this is all legal stuff. In a perfect world, you have a lessee who is not only agreeing to your rules, but is also comfortable and ultimately a flying, if not legal, partner. You want someone who will be happy living within the rules you setup. Someone who respects and cares for your airplane the same way you do as owner. But you should still be prepared for the inevitable minor damage or mistake. A lessee can make a mistake just like an owner. This requires an honest conversation between you and your potential customer. My rule of thumb for these situations is a minimum of three meetings with the potential customer. Two of those should be over food, and the last one should include considerable alcohol! You both need to drop the "good behavior" and find out who is doing business with whom.
Since that process is not foolproof, my bulk lease agreement provided that either party could terminate the agreement immediately; no notice necessary. If you don't want them flying your plane, or they don't want to be your customer, then either of you should be able to end the relationship, with no financial penalties, upon notice.
But be clear that whether DiamondShare as organized by Lifestyle, or a bulk hours lease organized by you as the owner, the pilot(s) who share the use of the plane, are not equity owners. It's your plane and you make the rules.
DiamondShare through Lifestyle, or a private bulk lease of hours done privately, are pretty much the same and neither is a partnership in any sense. Unlike a partnership, the original airplane owner is the owner; period. You are not sharing equity ownership, which renders moot most of the questions raised; though they would be relevant in a shared equity partnership. The lessees are customers who live within the rules of the lease agreement. The answers to most of those questions are up to the owner by virtue of how they draft the lease agreement. If you use the Lifestyle arrangement, then the rules are as they have defined. If you setup the same arrangement for yourself, you have a blank piece of paper and write the rules anyway you wish.
When I bulk leased hours on my DA40NG, I set down the rules to those questions in advance. So yes, you need to think through lots of situations and define them, as is the situation with any contract. As the owner, you make the rules. That is entirely unambiguous.
But this is all legal stuff. In a perfect world, you have a lessee who is not only agreeing to your rules, but is also comfortable and ultimately a flying, if not legal, partner. You want someone who will be happy living within the rules you setup. Someone who respects and cares for your airplane the same way you do as owner. But you should still be prepared for the inevitable minor damage or mistake. A lessee can make a mistake just like an owner. This requires an honest conversation between you and your potential customer. My rule of thumb for these situations is a minimum of three meetings with the potential customer. Two of those should be over food, and the last one should include considerable alcohol! You both need to drop the "good behavior" and find out who is doing business with whom.
Since that process is not foolproof, my bulk lease agreement provided that either party could terminate the agreement immediately; no notice necessary. If you don't want them flying your plane, or they don't want to be your customer, then either of you should be able to end the relationship, with no financial penalties, upon notice.
But be clear that whether DiamondShare as organized by Lifestyle, or a bulk hours lease organized by you as the owner, the pilot(s) who share the use of the plane, are not equity owners. It's your plane and you make the rules.