Legality of renting out a single seat experimental airplane.

Wolfy

Wolfy

Well-Known Member
I'm thinking down the road for my flight school. Right now I'm closing the deal on a Super Decathlon, but in a few years I bet some of my renters and I will be ready to "move up". So the question is: Could I buy a single seat experimental Pitts and rent it out?

A lot of people will knee-jerk react and say "No! It's a commercial operation!". But I think it's totally legal. I'm wondering if anyone else has any (supported) opinions or experience. And why an experimental anyway? They're cheaper, that's why. It's also a fun exercise in interpreting regs.


Most people point to 91.319(a)(2) to say it's illegal.
§ 91.319 Aircraft having experimental certificates: Operating limitations.

(a) No person may operate an aircraft that has an experimental certificate—
(1) For other than the purpose for which the certificate was issued; or
(2) Carrying persons or property for compensation or hire.


I have seen nothing to support that a private individual renting an airplane for fun is "carrying persons or property for compensation or hire". I've seen people point to the interpretation that flight time is compensation, but that's as part of an overall commercial operation, such as part 135 planes carrying boxes having non-commercially rated pilots in the right seat.

Other people point to (f)
(f) No person may lease an aircraft that is issued an experimental certificate under § 21.191(i) of this chapter, except in accordance with paragraph (e)(1) of this section.

Seems bad. Well, let's actually check out 21.191(i).
(i) Operating light-sport aircraft. Operating a light-sport aircraft that—

So that's just light sport. No problem there.

And that's where I stop. I can't find anything else that says it's against the rules. I've also checked out 119. I'm not flight instructing in the airplane, so none of that stuff applies. Anyone else have any info?
 
When you rent it out by the hour, it is for hire. Does it need 100hr inspections? That answers your question.

If you have a large number of owners (such a a club), it would be okay. The club could even pay you to do MX/scheduling.
 
drunkenbeagle said:
When you rent it out by the hour, it is for hire. Does it need 100hr inspections? That answers your question.
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There's no FAA rule that 100 hour needed = commercial operation. I don't think the plane even needs 100 hours!

Sec. 91.409 — Inspections.

(b) Except as provided in paragraph (c) of this section, no person may operate an aircraft carrying any person (other than a crewmember) for hire, and no person may give flight instruction for hire in an aircraft which that person provides, unless within the preceding 100 hours of time in service the aircraft has received an annual or 100-hour inspection and been approved for return to service in accordance with part 43 of this chapter or has received an inspection for the issuance of an airworthiness certificate in accordance with part 21 of this chapter. The 100-hour limitation may be exceeded by not more than 10 hours while en route to reach a place where the inspection can be done. The excess time used to reach a place where the inspection can be done must be included in computing the next 100 hours of time in service.

The airplane is not carrying passengers for hire. There's only one person in it, who is also the Pilot-In-Command.
 
drunkenbeagle said:
You would need to do checkouts in the thing, which would be for hire as well.
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Totally agree. Then it's for hire, and instruction and all that jazz. But that's why I'd go with a single seat. People would get aerobatic training in the Super D, and Pitts training somewhere else.
 
If you want to rent a single seat Pitts buy a factory one. But good luck no insurance company will provide coverage for solo rental. Hence why you always see two seat Pitts as dual only
 
mojo6911 said:
Insurance is going to be the biggest hurdle, methinks.
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My solution to that would be to have liability insurance for myself, and then require renters to hold liability and hull coverage renter's policies. For a $30,000 airplane, that's only $500 a year. And the rental rate would be low enough to compensate.
 
I think you will find the renter polices don't cover aerobatics. While not upfront about it I found out that AOPA non owned coverage wouldn't cover aerobatic damage even caused by error. Make sure you look hard into what will be covered
 
Inverted25 said:
I think you will find the renter polices don't cover aerobatics. While not upfront about it I found out that AOPA non owned coverage wouldn't cover aerobatic damage even caused by error. Make sure you look hard into what will be covered
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Thanks, I definitely will. It's amazing what's not covered in an insurance policy.
 
Wolfy said:
My solution to that would be to have liability insurance for myself, and then require renters to hold liability and hull coverage renter's policies. For a $30,000 airplane, that's only $500 a year. And the rental rate would be low enough to compensate.
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That's a lot of paperwork to chase. And I doubt many will be able/willing to get that coverage.

I think you will do better with a factory airplane, or get a bunch of prospective owners to form a club. Club owned experimental's aren't that hard to insure.
 
Wolfy said:
My solution to that would be to have liability insurance for myself, and then require renters to hold liability and hull coverage renter's policies. For a $30,000 airplane, that's only $500 a year. And the rental rate would be low enough to compensate.
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Nice try. Your liability insurance is invalid if the aircraft is being rented, meaning you are full exposed. There's no short-cutting the insurance industry. The vast majority of the cost of commercial/rental insurance is the liability coverage, the hull coverage is actually the cheap part.
 
rframe said:
Nice try. Your liability insurance is invalid if the aircraft is being rented, meaning you are full exposed. There's no short-cutting the insurance industry. The vast majority of the cost of commercial/rental insurance is the liability coverage, the hull coverage is actually the cheap part.
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Most insurance company's are happy to pay a claim that only involves the hull. Almost a rubber stamp.

A single seat aircraft actually has pretty low premiums for liability. No passengers makes it very low risk fr the insurer.
 
rframe said:
Nice try. Your liability insurance is invalid if the aircraft is being rented, meaning you are full exposed. There's no short-cutting the insurance industry. The vast majority of the cost of commercial/rental insurance is the liability coverage, the hull coverage is actually the cheap part.
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I know a flight school that did this. You get liability coverage that includes rental. And like drunkenbeagle said, single seat liability tends to be very low. The risk for liability is almost entirely the passengers. Running into another airplane or crashing into a million dollar house is possible, but very, very unlikely. Look at how doubling the seats on a plane nearly doubles the liability. The risk is all in the seats. If you crash your Pitts and hurt yourself, there isn't going to be a million dollar lawsuit coming up.
 
My experience with the FAA has taught me that if you find something you think is up for interpretation. It may be. But not by you. That "wiggle room" is reserved for the FAA.
 
The bigger picture though - I think experimental's are better left to owners, builders, and airshows.

The way things are now, safety is pretty good when the builder is flying. It is much worse when someone else is.

That happens enough, regulations will eventually change, and probably not in a way anyone wants.
 
chrisreedrules said:
My experience with the FAA has taught me that if you find something you think is up for interpretation. It may be. But not by you. That "wiggle room" is reserved for the FAA.
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Which is why if I got serious about it, I'd get a letter of interpretation from the FAA. I may even do it just for the hell of it.

The bigger picture though - I think experimental's are better left to owners, builders, and airshows.

The way things are now, safety is pretty good when the builder is flying. It is much worse when someone else is.

That happens enough, regulations will eventually change, and probably not in a way anyone wants.
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I stopped instructing in experimentals because I had "interesting stories" from my first 3 flights in 3 different airplanes. That's way too high!
 
OK, if you've checked pricing and believe you can get $500 rental liability, then more power to you. My experience says that's not likely, but I'm sure I've not spoken to every broker/underwriter out there.

As far as renting is concerned, I support your general belief. I do not believe there is any FAA regulation regarding it. I support your interpretation that it is not "carrying passengers or property for hire" and no 100 hour is required, that is used by FBO's frequently in that an airplane that's due for its 100 hours yet still in annual may be available for rental but not for flight instruction until the 100 hour is done. Renting use of a property is a business contract issue, not a flight activity regulated by the FAA.

Edit: of course, my opinion is just another worthless voice on the Internet, I'm not a lawyer, FAA employee, or anything else of importance :)
 
If I come to your operation and tell you that I'm qualified to rent your single seat airplane, how are you going to verify that? Sure, I have insurance but when I drag a wing tip or ground loop and it is down for repair, then what are you going to do?

Without validating the experience of the renter (conducting checkouts) you'll be repairing that airplane often.
 
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