In 2012, I bought a 1/4 share in a plane that was just out of annual. The bill hadn't come yet, but the partner who sold me the share assured me he'd pay it.

The $3000 bill for the annual arrived 6 months later. The partner who sold me the share claimed that he flew it only 5 out of the 125 hours leading up to the annual and didn't want to pay 1/4 of the bill. He wants to split the basic annual expenses by 4, and then prorate any additional "wear items."

But, before that 2012 annual was performed, the partners had agreed that each partner would pay 1/4 of the total expenses.

Now I want to sell my share, and one of the remaining partners says he will not approve the sale until the bill has been paid.

I have two questions:

1. Who is liable for the outstanding portion of the annual?

2. What should I do in this situation?

You need to ask Cary about the legal part. I started a flying club with a Colt at the same time I was the flight instructor for a CAP squadron in Gallup, NM. The squadron always came close to losing their C-172 in the winter for not flying enough. The CAP wisely required twenty hours per month. I had to pull teeth without pain killer to get them to just pay ahead in the winter and fly off the credit the rest of the year. With the private club, thirteen members, we wisely did not pro-rate any upgrade or maintenance. In a partnership or club you have to encourage flight. An airplane that doesn't fly costs more maintenance and eventually gets sold cheap; it goes away. The best way to encourage flight is to tax non-flight. If everybody pays equally on the maintenance, everybody will want to fly (get their fair share) out of the airplane. That airplane will not go away.

It shouldn't matter how much he flew it. He owned 1/4 share. He should pay 1/4 of annual cost. Did u get it in writing? I mean that he would pay as part of the deal. Is this guy still in the partnership?

Involved in a partnership....and quite happy with it.

All members share the fix costs equally. That means parking/hangar, insurance, annual inspection, maintenance repair costs, "agreed upon" upgrades, GPS updates, etc.

We charge ourselves an hourly rate to cover all of the operating costs such as fuel and oil. Upon purchase of the aircraft we took the approximate cost of an engine overhaul, divided it by the "time left to TBO" for the engine and added that to the hourly rate. Ended up being about $20 per hour. If one member flies 10 times more than the other...then that member has contributed more to the engine fund. I think that is a fair way to approach it. Did the same for the prop. We put this money aside so that at the end of the day....if one member decides to leave just before engine replacement or overhaul....the group has the money to continue and also to maintain the current value of the aircraft.

A long winded explanation to answer your question.....the individual was a member when the annual was done....who cares when the bill "arrived in the mail".. He or she pays his or her 1/4.

Macdon221

The guy who was responsible for it when it was performed while a partner. Unless you have it in writing or witnessed by the other partners. Why would the bill come 6 months after the annual was performed?

So I understand correctly, you bought a 1/4 share from a member wanting to exit the partnership and you took his place. At time of purchase, it was decided that the original owner of the share you bought would pay for his portion of the annual. So at the time you bought the share, your obligation towards annual should have been for the following annual and not the one currently being performed when you purchased the membership.

If my understanding is correct, did the other 3 pilots also agree for him to sell his membership before the annual was performed? Is there anything in writing? Seems it would be the other 3 pilots responsibility to collect the $750 from the old member and not yours.

Also he likely had been losing money on this partnership for a while if he only flew 5 hours and just wanted out.

If the other 3 pilots are not allowing you to leave before the annual is paid, then why did they let him?

Marc

Thanks guys!

Addicted2climbing wrote:So I understand correctly, you bought a 1/4 share from a member wanting to exit the partnership and you took his place. At time of purchase, it was decided that the original owner of the share you bought would pay for his portion of the annual. So at the time you bought the share, your obligation towards annual should have been for the following annual and not the one currently being performed when you purchased the membership.

If my understanding is correct, did the other 3 pilots also agree for him to sell his membership before the annual was performed? Is there anything in writing? Seems it would be the other 3 pilots responsibility to collect the $750 from the old member and not yours.

Also he likely had been losing money on this partnership for a while if he only flew 5 hours and just wanted out.

If the other 3 pilots are not allowing you to leave before the annual is paid, then why did they let him?

Marc

Marc, You got it exactly right. It wasn't in writing per se, but it said in the ad that the plane was "Fresh out of annual," he told me he'd pay it, and the other partners understood he'd pay it. He has actually agreed that he's liable, but he wants it prorated, since he flew 5 out of the 125 hours flown. He had another, better version of the same plane in another hanger at the same airport.

Glidergeek wrote:The guy who was responsible for it when it was performed while a partner. Unless you have it in writing or witnessed by the other partners. Why would the bill come 6 months after the annual was performed?

Glidergeek, the people who did the work just took ages to bill us. It took a really long time. I don't know if it was six months, but it was certainly long enough (4+ months) for him to sell the plane. It wasn't his intention not to pay it, I don't think. It was just more expensive than he expected, especially since he flew just 5 hours.

Crzyivan13 wrote:It shouldn't matter how much he flew it. He owned 1/4 share. He should pay 1/4 of annual cost. Did u get it in writing? I mean that he would pay as part of the deal. Is this guy still in the partnership?

I have only the ad and some emails that make it obvious he's arguing against his having to pay it. He is not still in the partnership, I bought his 1/4 share.

I'd withold my dues until the other 3 members track down this guy to get their $750.. The other 3 partners should have got something in writing in regards to you entering onto the partnership and him exiting with an outstanding annual obligation.

Yet another lesson in "get it in writing." Or as Yogi Berra might say, "an oral contract isn't worth the paper it's written on."

That's not entirely true, of course. Oral contracts are enforceable just about everywhere. But all contracts are much better off in writing--otherwise you're into the "he said, she said" sort of game. But, if you have emails and other correspondence from him, you may be able to impute a contract from them.

If you have all that stuff, and if it's worth your time, give some consideration to using the Small Claims Court where you live (or actually where he lives--many states limit the SC jurisdiction to the county in which the defendant lives). Give him written notice that you expect him to pay by a date certain (most SC rules require that first), and if he doesn't pay, then sue in SC court.

But get your ducks lined up. Print all the emails that evidence his promises to pay his share. Prepare before you go to court--don't try to wing it. And don't do like so many did when I was a small court judge: "Well, I left that at home, but it says...", and I'd stop them and say, "This is your chance. If you're not prepared today with your evidence, then I have to dismiss the case." I was nice enough to let them run out to the car if they left it out there, but that was about it.

Cary