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Not sure you should use a boilerplate in this case. There's a lot riding on a partnership, mostly your financial future, and if the boilerplate doesn't contain specific language, you could regret it later on. This could be a classic case of I don't know enough to know what I don't know.

My suggestion, use an aviation attorney. It could be money well spent.

 

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An edit to my answer to a similar question elsewhere.

I have issues with boilerplate agreements and most self-help contracts. It's not the form. It's the people. I've seen folks use them, cobble them together from different sources, include sentences they though sounded good but actually conflicted with other provisions, decide they didn't need certain provisions and cross them out only to spend a lot more resolving a dispute which would have been resolved by what they took out.

I've seen a really big problem arise in an airplane group and was able to stop the bleeding in a matter of a few days with one document and one letter because of the quality of the group contract. I've had inquiries asking simple, "how do we handle this?" questions and able to answer it quickly because it was anticipated up front.

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I was asking the question to see if anyone had a starting point.  Not to tell me my process is wrong.  I have been writing contracts in my professional life for several years and am capable of checking through the wording to be sure there aren't conflicts.  I am open to input about sections in a contract that people have found helpful or important.  Even using an aviation lawyer it would still be helpful to have worked through a basic form of the contract first with your co-owner instead of paying the lawyer to do the same thing while you and the co-owner negotiate on certain provisions or make simple edits.  It's also nice to have a starting point (boiler plate if you will) to have something to add your provisions to that are specific to your agreement and then have reviewed by a lawyer if desired.  

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12 hours ago, Jim Peace said:

don't do it.....

I think Jim's point is that if you need boilerplate language and a lawyer-written contract, you definitely won't enjoy the partnership.  So if you aren't going to enjoy the partnership, don't do it in the first place.

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I think Jim's point is that if you need boilerplate language and a lawyer-written contract, you definitely won't enjoy the partnership.  So if you aren't going to enjoy the partnership, don't do it in the first place.

I see what you’re saying but don’t agree. There needs to be something in writing for circumstances outside of general operation. If your co-owner dies how will you decide how you’ll buy out their half or will it transfer to their estate and end up in probate potentially indefinitely? If they crash the airplane and somebody sues them, how will you point to something saying that they were supposed to operate it safely and you didn’t condone whatever happened? I just think of these variables in any agreement. You can be the best of friends and have a wonderful co-ownership but if something out of the ordinary happens you need something to fall back on.


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1 hour ago, Andy95W said:

I think Jim's point is that if you need boilerplate language and a lawyer-written contract, you definitely won't enjoy the partnership.  So if you aren't going to enjoy the partnership, don't do it in the first place.

What I was thinking is that partners for the most part suck....there is always one who cares more about mx than the other, one who flys more than the other, one who is messier than the other........It is especially annoying with the mx stuff......There are two types of owners....one who is proactive with mx and acquires an airplane at the price point so he can use an open checkbook approach to have 100% dispatch reliability and peace of mind when flying friends and family,,,, then there is the cheap fuck who's airplanes you rather not be in.......you know the type, someone who prides himself in being the person who can spend the least and do the bare minimum to be legal.....they do this to be cool or something....probably keep a pack of cigarettes in their shirt sleeve.....

Same guys who hate talking to ATC and shun the idea of ADS in and out rules being jammed up their butt.......the list goes on and on and on......

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10 minutes ago, Jim Peace said:

What I was thinking is that partners for the most part suck....there is always one who cares more about mx than the other, one who flys more than the other, one who is messier than the other.......

I don't disagree with your sentiment, but always maybe somewhat extreme.  I've had two Mooney partnerships, for a total of 12 years, and that doesn't describe my experience.  Sure there were differences, but not to the extreme you imply.

I guess I was just lucky.   Twice.

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It is better to be lucky than good.........

Or you can hedge your bets by vetting your partner first. Just like finding a tenant on a rental property. You can’t always be right but a little vetting on the front end goes a long way. I’m not just picking up a random pilot at the airport. I’m sorry if you’ve had bad experiences or have heard of them.


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I didn't know any of my partners until we got together to buy the plane.  We ironed out the agreement first, then found the plane.  I have no complaints.  The only difference is that I bring a wet wash mitt with me every flight and remove the bugs and bird crap when I'm done flying for the day.  The others are not as faithful.  However, they have occasionally crawled under the plane to clean the belly which I've only done during the annual when the belly was not under the plane.  We always fix things when they break and our partnership is structured to allow some partners to pay more for upgrades than others in exchange for a larger percentage share of the LLC.

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42 minutes ago, Bob - S50 said:

I didn't know any of my partners until we got together to buy the plane.  We ironed out the agreement first, then found the plane.  I have no complaints.  The only difference is that I bring a wet wash mitt with me every flight and remove the bugs and bird crap when I'm done flying for the day.  The others are not as faithful.  

I've seen that in operating rules for both small co-ownerships and flying clubs.

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4 hours ago, Huitt3106 said:

I was asking the question to see if anyone had a starting point.  Not to tell me my process is wrong.  I have been writing contracts in my professional life for several years and am capable of checking through the wording to be sure there aren't conflicts.  I am open to input about sections in a contract that people have found helpful or important.  Even using an aviation lawyer it would still be helpful to have worked through a basic form of the contract first with your co-owner instead of paying the lawyer to do the same thing while you and the co-owner negotiate on certain provisions or make simple edits.  It's also nice to have a starting point (boiler plate if you will) to have something to add your provisions to that are specific to your agreement and then have reviewed by a lawyer if desired.  

Then you might as well start with the AOPA co-ownership template. Or just Google airplane co-ownership agreement or airplane partnership agreement. Plenty there to choose from.

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Often a speaker loses control and drops the F-bomb...

Some People tend to ignore whatever gets said after that moment...

Doing it in a written format lasts a bit longer...

 

Keep in mind, there are certain parts of the Mooney world where the F-bomb is way more offensive, than in others...

It is really interesting how certain words get stored at the core of the cognitive facilities... it is really hard to not use them while under pressure... or while not thinking extra hard...

Why take advice from somebody under pressure, or not thinking... or not putting in any extra effort?

:)

Best regards,

-a-

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Veteran of a 16-year Mooney partnership here: 6 different people over those years, 3 or 4 active at any one time.  Here's my $0.02 on things that are helpful to have in a written partnership agreement, even among a group of genial partners with lots of genuine goodwill:

Operations:

  • Define how decisions about changes to scheduling, fueling, insurance, maintenance, and upgrade polices are made.  Negotiate the initial policies however you like, but sooner or later someone is going to propose a change after the partnership is established.  Decide in advance whether such changes require unanimous consent or majority vote.  For the most part we use the former, but there are certain minor changes that may be made by majority vote.
  • Define how squawks are communicated, so everyone knows what shape the airplane is in.  The point of this must not be to assess blame, but only to ensure all pilots are maximally informed about the state of the airplane.  The reason the policy has to be written down is so everyone knows where to look for squawk info.  It avoids honest mistakes where a good partner tried to communicate something about the airplane, but another partner didn't read the e-mail/look for the squawk sheet/whatever.  For what it's worth, I used to think the best way to do this was a written squawk sheet in the aircraft; but it turns out text messages and/or phone calls are better for our small partnership.  It allows questions, and helpful back-and-forth about what to do next.
  • Document what level of insurance will be maintained, and - most importantly - if it is always funded equally, or if a less-experienced pilot must carry whatever extra burden they cause on the premiums.  My advice?  Fund it equally.  Actuarial tables don't lie, but that's only aggregated across large numbers.  When dealing with individuals, choose a partner you trust, and share the premiums.  If you can't muster the goodwill to share the load on the high-experience side and be extra careful on the low-experience side, you don't have the temperament for a a partnership.
  • Decide if anyone ever gets to fly for free in exchange for services rendered.  Common reasons for this might include ferrying the airplane to a shop for maintenance, or getting flight time in exchange for performing maintenance or administrative tasks on behalf of the partnership.  My advice?  Don't even stick your toe in the water on this, always require the rack rate be paid to fly the airplane regardless of services rendered.  It's not that I'm unsympathetic to the concept of earned credit, but I think the difficulty of agreeing on specific values for specific services results in flight-time-for-services-rendered causing more problems than it solves.
  • Clearly spell out what happens if a partner is financially in arrears to the partnership.  How long do they have to make things right, and what restrictions are placed on their privileges while in arrears?  The policy itself doesn't have to be draconian, you can choose to tolerate, e.g., up to $100/month in arrears for up to 12 months before action it taken.  But you need to decide in advance when a partner in arrears may no longer fly the airplane, when they are required to sell their share, etc.

Equity:

  • Require an annual meeting of the partnership at which you agree and document the value of the airplane, and partners' equity.  Having an agreed-on value of the airplane once per year drives a lot of other decisions, e.g. how much insurance to buy, starting point for adding/removing partners, what the widow(er) is owed if one of the partners dies, etc.
  • Spell out a policy regarding changes in equity, particularly with respect to unequal funding of upgrades.  Sooner or later, one partner is going to really, really want some upgrade gizmo, enough to offer to pay for all of it, or at least more than their equal share of the cost.  Establish a clear rule about whether or not doing so is allowed, and if so whether it changes the equity shares in the partnership.
  • Work up and write up financial arrangements that roughly counteract depreciation over time.  The exact details aren't critical, but the value of the airplane plus the cash the partnership has in a partnership-specific bank account shouldn't vary by more than aircraft market fluctuation.  This is easiest to explain by a specific, big-ticket example: our partnership bills pilots $12.50/hour toward an engine overhaul.  But the reason we do this is *not* to have enough cash in the bank to pay for an overhaul with no out-of-pocket cost.  That is an impossible goal, because one never knows when an overhaul will be needed.  However, after 16 years of operation and approaching 2100 hours SMOH, we have about $17K in the bank that offsets the fact our airplane is now valued as a run-out, vs. being valued with a relatively low-time engine back at the time of purchase.  Financial arrangements of this type minimize arguments over one partner "using up the airplane" by flying it more.  They also establish a standard that the financial goal of the partnership is to maintain value.  This is really helpful in driving maintenance decisions, e.g. a malfunctioning vacuum AI can be replaced with a G5, but the starting point is to install the same vacuum AI so as to maintain the value of the partnership.
  • Decide what happens if a partner dies.  Not fun to think about, of course, but these things can happen, and it's an awful time to try to figure something out.  It's best if the partnership agreement spells out something simple, and easy for the grieving spouse to understand and follow.

Now, for a change of pace, here are some things everyone talks about which you're probably going to write down, but which I contrarily argue are not really what make or break a partnership:

  • Scheduling policies:  Sure, you're going to have some: reserved weeks or priority for scheduling, or maximum trip times, or whatever.  But no scheduling rules can prevent conflicting desires, and all that really matters is whether the partners have goodwill about it.  Bad partners think, "I've gotta guarantee I get my fair share!"  Good partners think, "I'm glad Bob is flying the airplane, the partnership is healthy when everyone wants to fly"; or "Joe has priority on the airplane this week, but I'd really like to fly, I wonder if he might enjoy some company trading legs on his trip."  So define any scheduling policy you want, but understand that it's essentially guaranteed partners will ask for variances or changes to the rules (see above).
  • Fueling policies:  Sure, you're going to decide on wet vs. dry rates, preferred fuel supplier, preferred storage level, etc.  But what you care about is flexibility.  When you get home late at night and it's bitterly cold, and you're tired, and the pump/FBO is on the other end of the field, can you put the airplane away with only half tanks and e-mail your partners that you'll make it right tomorrow?  Will they write back and say, "No problem, I don't need much gas and I'll fill it up after my flight on Sunday"?  If you find cheap fuel on a $100 burger run, can you make an executive decision to fill the tanks for the benefit of the partnership?  If the self-serve pump is busted, are you really obligated to pay the FBO rate on the spot to fill to the required level or can you make it right later?  These things come up all the time, and you want partners with some graciousness about it.  A good test of this is to think about how you feel about paying to replace fuel someone else burned.  If you bill a wet rate, this doesn't matter.  If you bill a dry rate, are you irritated about getting reimbursed, or do you see it as an opportunity to get together with your partner for breakfast, let him pick up the tab, and call it close enough?
  • Risk management policies: no landings on dirt, no international flights, who is an "authorized" instructor or co-pilot, VFR/IFR/wind limits, etc.  You're looking for partners who approximately share your risk tolerance, and who you trust to operate within that general risk tolerance.  No written document is going to cover all the corner cases, and even if it did, the nature of risk is such that words written on a page aren't particularly interesting.
  • "Small stuff" of varying kinds: you can write down that everyone should wipe off bugs after flying, require or prohibit the tow bar from being left on the nose gear, require the strobe switch be left on all the time, etc.  But real humans genuinely forget or perform to different standards on these things in real life.  If finding bugs on the airplane when you come out to fly is genuinely going to drive you nuts, you don't have the temperament for a partnership.

Summary advice: fewer rules are better; and it's more important for them to be simple and clearly defined, than it is for the rules to be perfectly equitable in all the various corner cases that might occur.  If rule negotiations with a potential partner bring up all kinds of nickel-and-dime corner cases where the person is overly concerned about being treated fairly, that's not the type of person you want as a partner.  The guiding principal is that owning in a partnership saves huge amounts of money over sole ownership, and that should make it easy to have lots of goodwill about schedule conflicts and shared costs in the 1 AMU or less range.

Hope that's helpful to the OP.  I don't claim my way of thinking is better than anyone else's, just wanted to contribute some real-life experience with partnerships.

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Summary...

1) When looking for a group agreement on all things shared ownership related...

2) AOPA has some basic agreement things to start with...

3) Anything this complex should have written guidelines... because after a year, the memory challenges of what was agreeable will be incredibly difficult...

4) Friends and family are better sharing things without needing legal documents...

5) In the end... there is no substitute for actual legal documents, even when friends and family are included...

6) Sharing real life experience in an understandable format beats a brief don’t do it... :)

PP thoughts of what I read above, not a lawyer...

Best regards,

-a-

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6 hours ago, Vance Harral said:

Veteran of a 16-year Mooney partnership here: 6 different people over those years, 3 or 4 active at any one time.  Here's my $0.02 on things that are helpful to have in a written partnership agreement, even among a group of genial partners with lots of genuine goodwill:

Operations:

  • Define how decisions about changes to scheduling, fueling, insurance, maintenance, and upgrade polices are made.  Negotiate the initial policies however you like, but sooner or later someone is going to propose a change after the partnership is established.  Decide in advance whether such changes require unanimous consent or majority vote.  For the most part we use the former, but there are certain minor changes that may be made by majority vote.
  • Define how squawks are communicated, so everyone knows what shape the airplane is in.  The point of this must not be to assess blame, but only to ensure all pilots are maximally informed about the state of the airplane.  The reason the policy has to be written down is so everyone knows where to look for squawk info.  It avoids honest mistakes where a good partner tried to communicate something about the airplane, but another partner didn't read the e-mail/look for the squawk sheet/whatever.  For what it's worth, I used to think the best way to do this was a written squawk sheet in the aircraft; but it turns out text messages and/or phone calls are better for our small partnership.  It allows questions, and helpful back-and-forth about what to do next.
  • Document what level of insurance will be maintained, and - most importantly - if it is always funded equally, or if a less-experienced pilot must carry whatever extra burden they cause on the premiums.  My advice?  Fund it equally.  Actuarial tables don't lie, but that's only aggregated across large numbers.  When dealing with individuals, choose a partner you trust, and share the premiums.  If you can't muster the goodwill to share the load on the high-experience side and be extra careful on the low-experience side, you don't have the temperament for a a partnership.
  • Decide if anyone ever gets to fly for free in exchange for services rendered.  Common reasons for this might include ferrying the airplane to a shop for maintenance, or getting flight time in exchange for performing maintenance or administrative tasks on behalf of the partnership.  My advice?  Don't even stick your toe in the water on this, always require the rack rate be paid to fly the airplane regardless of services rendered.  It's not that I'm unsympathetic to the concept of earned credit, but I think the difficulty of agreeing on specific values for specific services results in flight-time-for-services-rendered causing more problems than it solves.
  • Clearly spell out what happens if a partner is financially in arrears to the partnership.  How long do they have to make things right, and what restrictions are placed on their privileges while in arrears?  The policy itself doesn't have to be draconian, you can choose to tolerate, e.g., up to $100/month in arrears for up to 12 months before action it taken.  But you need to decide in advance when a partner in arrears may no longer fly the airplane, when they are required to sell their share, etc.

Equity:

  • Require an annual meeting of the partnership at which you agree and document the value of the airplane, and partners' equity.  Having an agreed-on value of the airplane once per year drives a lot of other decisions, e.g. how much insurance to buy, starting point for adding/removing partners, what the widow(er) is owed if one of the partners dies, etc.
  • Spell out a policy regarding changes in equity, particularly with respect to unequal funding of upgrades.  Sooner or later, one partner is going to really, really want some upgrade gizmo, enough to offer to pay for all of it, or at least more than their equal share of the cost.  Establish a clear rule about whether or not doing so is allowed, and if so whether it changes the equity shares in the partnership.
  • Work up and write up financial arrangements that roughly counteract depreciation over time.  The exact details aren't critical, but the value of the airplane plus the cash the partnership has in a partnership-specific bank account shouldn't vary by more than aircraft market fluctuation.  This is easiest to explain by a specific, big-ticket example: our partnership bills pilots $12.50/hour toward an engine overhaul.  But the reason we do this is *not* to have enough cash in the bank to pay for an overhaul with no out-of-pocket cost.  That is an impossible goal, because one never knows when an overhaul will be needed.  However, after 16 years of operation and approaching 2100 hours SMOH, we have about $17K in the bank that offsets the fact our airplane is now valued as a run-out, vs. being valued with a relatively low-time engine back at the time of purchase.  Financial arrangements of this type minimize arguments over one partner "using up the airplane" by flying it more.  They also establish a standard that the financial goal of the partnership is to maintain value.  This is really helpful in driving maintenance decisions, e.g. a malfunctioning vacuum AI can be replaced with a G5, but the starting point is to install the same vacuum AI so as to maintain the value of the partnership.
  • Decide what happens if a partner dies.  Not fun to think about, of course, but these things can happen, and it's an awful time to try to figure something out.  It's best if the partnership agreement spells out something simple, and easy for the grieving spouse to understand and follow.

Now, for a change of pace, here are some things everyone talks about which you're probably going to write down, but which I contrarily argue are not really what make or break a partnership:

  • Scheduling policies:  Sure, you're going to have some: reserved weeks or priority for scheduling, or maximum trip times, or whatever.  But no scheduling rules can prevent conflicting desires, and all that really matters is whether the partners have goodwill about it.  Bad partners think, "I've gotta guarantee I get my fair share!"  Good partners think, "I'm glad Bob is flying the airplane, the partnership is healthy when everyone wants to fly"; or "Joe has priority on the airplane this week, but I'd really like to fly, I wonder if he might enjoy some company trading legs on his trip."  So define any scheduling policy you want, but understand that it's essentially guaranteed partners will ask for variances or changes to the rules (see above).
  • Fueling policies:  Sure, you're going to decide on wet vs. dry rates, preferred fuel supplier, preferred storage level, etc.  But what you care about is flexibility.  When you get home late at night and it's bitterly cold, and you're tired, and the pump/FBO is on the other end of the field, can you put the airplane away with only half tanks and e-mail your partners that you'll make it right tomorrow?  Will they write back and say, "No problem, I don't need much gas and I'll fill it up after my flight on Sunday"?  If you find cheap fuel on a $100 burger run, can you make an executive decision to fill the tanks for the benefit of the partnership?  If the self-serve pump is busted, are you really obligated to pay the FBO rate on the spot to fill to the required level or can you make it right later?  These things come up all the time, and you want partners with some graciousness about it.  A good test of this is to think about how you feel about paying to replace fuel someone else burned.  If you bill a wet rate, this doesn't matter.  If you bill a dry rate, are you irritated about getting reimbursed, or do you see it as an opportunity to get together with your partner for breakfast, let him pick up the tab, and call it close enough?
  • Risk management policies: no landings on dirt, no international flights, who is an "authorized" instructor or co-pilot, VFR/IFR/wind limits, etc.  You're looking for partners who approximately share your risk tolerance, and who you trust to operate within that general risk tolerance.  No written document is going to cover all the corner cases, and even if it did, the nature of risk is such that words written on a page aren't particularly interesting.
  • "Small stuff" of varying kinds: you can write down that everyone should wipe off bugs after flying, require or prohibit the tow bar from being left on the nose gear, require the strobe switch be left on all the time, etc.  But real humans genuinely forget or perform to different standards on these things in real life.  If finding bugs on the airplane when you come out to fly is genuinely going to drive you nuts, you don't have the temperament for a partnership.

Summary advice: fewer rules are better; and it's more important for them to be simple and clearly defined, than it is for the rules to be perfectly equitable in all the various corner cases that might occur.  If rule negotiations with a potential partner bring up all kinds of nickel-and-dime corner cases where the person is overly concerned about being treated fairly, that's not the type of person you want as a partner.  The guiding principal is that owning in a partnership saves huge amounts of money over sole ownership, and that should make it easy to have lots of goodwill about schedule conflicts and shared costs in the 1 AMU or less range.

Hope that's helpful to the OP.  I don't claim my way of thinking is better than anyone else's, just wanted to contribute some real-life experience with partnerships.

Thank you.  This is very helpful!  

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