What is FAA form 8050-3 and what becomes of it after an aircraft sale?
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FAA form 8050-3 is the certificate of aircraft registration. It is issued to an owner and is to be carried aboard the aircraft at all times. It need not be displayed, so it is usually tucked in behind the airworthiness certificate, which must be displayed.

The AOPA pilot information center receives calls weekly from buyers who are not sure what to do with the 8050-3 they were given by the seller of the aircraft they just purchased.

As the seller, please, please, please do not give your registration certificate to the buyer! Do remove it, flip it over and complete the sale information, then return it to FAA Aircraft Registry yourself. Upon receipt, FAA will remove your information from the registration database and put the aircraft into a ‘sale reported’ status, pending receipt of a registration application (and bill of sale) from the buyer.

If you, as the seller, do not return this to FAA, the new owner could fly on your registration for months, or even years. They are not supposed to, but that is the problem after a sale - you no longer have any control over that aircraft, or the documents that went with it.

FAR 47.41(b) states that the seller must return the certificate of registration within 21 days of the sale.

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Daddis At AOPA: 
 

If you, as the seller, do not return this to FAA, the new owner could fly on your registration for months, or even years. They are not supposed to, but that is the problem after a sale - you no longer have any control over that aircraft, or the documents that went with it.

Like my buddy Kenny, who let the buyer fly off with his old registration certificate, and six month later had a couple of DEA agents at his front door wondering why Kenny's plane was sitting in the desert in New Mexico with a bunch of cocaine residue in it. :eek: