Information for the Aircraft Owner Considering Leaseback

The Santa Cruz Flying Club offers a somewhat different arrangement than the traditional FBO-leaseback in that the owner has control over the maintenance of his or her aircraft, and has funds available to him or her sooner. This arrangement also may have tax advantages (active vs. passive loss).

SCFC itself is a non-profit tax-exempt organization whose charter restricts it mainly to social and scheduling functions. It looks to renters and students very much like a traditional FBO/flight school (except that they write the owner's name rather than the club's name on their rental checks), however, it is quite different. All owners and instructors function as independent contractors. The club is run by a general manager and board of directors consisting of an owner representative, a CFI representative, two renter/student representatives, and their respective alternates. Aircraft are covered on a fleet policy that is held by the club, which bills back ONLY its COSTS (a pass-through) to the owners. The club rents a pool of tie-down spots and bills back ONLY its COST (a pass-through) to the owners. The only additional cost to the owners is a 10% management fee on gross proceeds. Itemized bills are produced at end-of-month for that month, and become overdue at 30 days. Maintenance and all other costs are the responsibility of the owner.

Although by the letter of the law only annual, pitot-static, transponder, and ELT inspections are required on the aircraft, under advice from the FAA, SCFC has made a policy of requiring 100-hr. inspections and 50-hr oil changes. Although Watsonville Aviation does the majority of the maintenance on club aircraft (and they give preference to club aircraft in their maintenance schedule), you are free to choose any FAA-licensed mechanic. Owner-assisted maintenance and inspections are permitted with the supervision and signoff of an FAA-licensed mechanic. The club will promote the rental of all aircraft (SCFC has a running ad in the Yellow Pages and a webpage), collect rental fees, do its best to inform owners of upcoming maintenance, and deal with emergency maintenance as needed. Renters sign an agreement at each rental to comply with all club and FAA regulations. The general manager checks that they are current. Renters fill out a checkout sheet for each type aircraft and complete an initial checkout to the satisfaction of a club CFI.

Owners may put any restrictions they wish on aircraft use (minimum hours experience required, length of checkout, etc.). However, they must schedule all maintenance and personal use; the renters have paid for their checkout with an expectation that the aircraft will be available as the schedule indicates. Maintenance and personal use must be noted in the aircraft's daily log (in the notebook for the aircraft). The club has a policy of requiring a minimum rental of two hours if an aircraft is taken for an entire weekday day (24 hours), and three hours on weekends. However, we request that you be flexible; the policy is mainly intended to stop gross abuse by the renter (a problem we have very rarely had, but felt needed addressing). Renters are asked to call you beforehand if they anticipate not making the minimum rental, and are not held to it if they make a safety decision not to fly (weather, illness, mechanical problems, etc.). Other owners in the past have usually waived the minimum if asked.

SCFC's landlord requires that any aircraft tied down in his spots be insured. If the aircraft is grounded for extended periods you may opt for ground-only coverage; make sure the general manager makes the change. Aircraft on ground-only coverage may not be flown at all. You must have the general manager put the aircraft back on full flight coverage before anyone flies the aircraft. Note that our insurance company only is available during normal business hours; leaving a FAX or message for them is not good enough, and they will not honor it as notification. For your own protection, follow up everything in writing regarding insurance.

Your aircraft logs are required by an FAA Examiner during checkrides. SCFC has a safe available to store these logs on site, or you may leave them with your mechanic and inform SCFC where they are, or retain them yourself. You may also leave a copy of your logs in the safe, and update the copy promptly after each maintenance. The first option is the most convenient to renters and the CFIs.

The club will need the following information to put your aircraft on the schedule:

• Name and address of registered owner(s) and leinholder (if any)
• Your phone number(s) - we may need to reach you on short notice, so give us as many ways to reach you as possible
• Year and hull value of your aircraft
• Any restrictions you want to place on aircraft use (see back of rental agreement for restrictions the club imposes)
• Minimum experience required. Club default is 5 hours TT, 1 hour in type, 1 in the aircraft
• Any additional checkout requirements
• Whether you want to offer free or reduced-rate rentals to CFIs for their own checkouts (a common procedure)
• Who you want to do the initial CFI checkouts
• If you are interested in offering discounted block time, and what the rate would be
• What your rental rate will be
• The aircraft must have current inspections.

Renters are turned off by bad radios, equipment that doesn't work, squawks that don't get fixed or addressed, and aircraft that are taken by the owners without any notice. It normally takes several months for an aircraft's use to ramp up, so don't be discouraged if your rental receipts are low at first. If you keep your aircraft in good working order, relatively clean, and can work with the minor hassles that come with any rental aircraft, we feel that you will soon have a set of dedicated renters that will keep your aircraft's schedule comfortably full and your income at a happy level. The club is here to help you out, and we want to do our best to keep your aircraft flying. If you have any ideas about what the club should do (social events, promotions, ads) please tell us! We're a group of people who love flying.