When you finance an airplane with intent to operate it privately (pleasure & business), then later change the purpose of operation to commercial (lease back), are you required to report the change of purpose to the financing company? I know these companies initially estimate how many hours the airplane flies/year and takes depreciation into consideration when they decide how much to put down & what the rate is. I'm just comparing this to a house-- initially purchased as a primary residence but later turns into a rental property; I don't hear many people reporting the change of status to their banks. How does this work on airplanes?
2 Replies
Hi Hirokazu,
I would highly recommend that you talk with an attorney about what your legally required to do. If you have the Legal Services Plan (PPS) with AOPA you can reach out to them for help with this question. They may even have you speak with a Panel Attorney in your state. You can give us a call at 1-800-USA-AOPA and make the selection for legal services, or you can click here to fill out the form for them to call you.
I would highly recommend that you talk with an attorney about what your legally required to do. If you have the Legal Services Plan (PPS) with AOPA you can reach out to them for help with this question. They may even have you speak with a Panel Attorney in your state. You can give us a call at 1-800-USA-AOPA and make the selection for legal services, or you can click here to fill out the form for them to call you.
It would all depend on what is written in the financing contract and the contract laws of the state under whose laws the contract was written. You'd need to ask an attorney who knows those laws to review that contract.