The United States Federal Aviation Administration (FAA) requires that leases and conditional sales contracts for large U.S. registered civil aircraft be filed with the FAA in accordance with 14 CFR 91.23 – Truth In Leasing.
How to Comply with Truth in Leasing
In order to comply with the FAR § 91.23, Truth in Leasing requirements for your dry lease you must take all of the following actions:
1. Have your experienced aviation counsel prepare the lease to comply with FAR § 91.23. The lease must include a written truth-in-leasing clause as a concluding paragraph in large print, immediately preceding the space for the signature of the parties and that clause must contain specific information required by the regulation.
2. The lease should contain a certification that each person understands the responsibilities for compliance with applicable Federal Aviation Regulations and the signature of a person responsible for operational control of the aircraft under the lease.
The lessee (or the registered owner if the lessee is not a citizen of the United States) should mail a copy of the lease to the FAA Aircraft Registration Branch, Attn: Technical Section, P.O. Box 25724, Oklahoma City, OK 73125, within 24 hours after the execution.
Notification Requirement Prior to First Flight
The lessee (or the registered owner if the lessee is not a citizen of the United States) should provide in-person or telephonic notice to the appropriate Flight Standards Office least 48 hours prior to takeoff of the first flight under the lease. The requirement was previously to notify the “Flight Standards District Office” and this was changed to “Flight Standards Office” after the FAA re-organization. The Flight Standards Office must be informed about:
(i) the location of the airport of departure,
(ii) the departure time, and
(iii) the registration number of the aircraft.
Carry a Copy of the Lease on the Aircraft
Carry a copy of the lease in the airplane at all times. The copy of the lease must be made available for review upon the FAA’s request.
For information about Truth In Leasing and how it affects your transaction, please seek the advice of aviation legal counsel familiar with the regulations.
Melissa K. Gowin is a Senior Legal Assistant with the aviation law firm of Jetstream Aviation Law, P.A. and assists attorneys, clients and escrow agents in coordinating documentation for complex aircraft purchase, sale and financing transactions. Jetstream Aviation Law can be found at www.jetstreamlaw.com. Melissa K. Gowin (firstname.lastname@example.org)