Aircraft Pre-purchase Inspection Basics, Part 2

[Last month we started a series of blogs on the benefits of a pre-buy inspection, courtesy of Doug Pendleton, our Regional Sales Manager in Atlanta.  Doug is a long-time commercially-rated pilot, A&P mechanic, former FBO owner, has owned numerous aircraft, and had spent nearly a decade in aircraft sales before joining the team at AirFleet.]

You have picked out the plane you intend to buy and are ready to negotiate the pre-purchase inspection.  It’s time to “negotiate”, because this is an important step, and you should know that this step effectively serves the interests of both the buyer and seller.   For example, the buyer wants to establish the aircraft is in sound condition, and the seller wants assurance that his aircraft will not be “held hostage” for an unreasonable length of time by a perceived “nitpicking” examination.

A customary middle ground goes something like this:  “The buyer agrees to cover the cost of the inspection with the seller willing to cover the corrective expense for any airworthiness discrepancies.”   It is also customary for both buyer and seller to have some sort of escape clause if either come to believe the inspection has disclosed problems beyond what either is willing to correct.  This type of agreement can be very simple, or it can become very complex.  The complexity is generally in proportion to the value of the aircraft being inspected, thus the reference to “negotiation” on the terms of the inspection.   The “airworthiness discrepancies” language is suggested because it establishes an objective standard for the inspection.  This helps to eliminate any subjective “nitpicking” which can often lead to disagreement between buyer and seller.

Furthermore, it is generally advisable to have the aircraft inspected by an independent 3rd party and preferably not someone who has been previously maintaining that specific aircraft (and not someone with a vested interest in the sale).  Depending on the location of the aircraft and availability of A&P’s, this may require repositioning the aircraft, which is an expense customarily covered by the buyer.

In addition, it is usually advisable to structure a ”triage”  form of inspection where you look for major deal breakers first then progress deeper into the inspection as the larger concerns are eliminated.  This especially helps to control costs and time invested.   For example, signs of unreported major damage history, excessive corrosion, or lack of A.D. compliance may be something that can be detected quickly with minimum time and expense.

One last tip – it is also helpful if the A&P can be furnished with electronic or PDF copies of the logbooks in advance.   This gives your pre-buy inspector due time to evaluate damage, AD compliance, and routine service before you spend the money transporting people to the site of the physical inspection.  Several potential deal-killers can be discovered just by an educated review of the logs.

In our next segment, we will address how to evaluate the inspection results.


One thought on “Aircraft Pre-purchase Inspection Basics, Part 2

  1. Rick Rossner April 14, 2011 / 3:49 pm

    Great advise indeed! My company does a lot of buyer assisted acquisitions and I always proceed with a signed letter of engagement of which outlines all the principals of the deal including price, of which both buyer and seller agree to prior to the movement of the aircraft of subject. This way we know that both buyer and seller are on the same page in terms of the deal itself, and what the buyer and seller agree to do and not to do with the “Subject To” caveat in terms of the seller and buyer’s acceptance of the outcome of the pre-buy inspection itself.

    Rick Rossner

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s