An aircraft bill of sale is a legal document that formalizes the transaction details when an aircraft is sold from one private party to another. It serves as a vital record, providing proof of purchase and establishing the transfer of ownership of the plane.
This document typically includes essential information such as the make, model, and serial number of the aircraft, the names and addresses of the seller and buyer, the sale price, and the date of the transaction:
- For the buyer, it is essential documentation for registering the aircraft with aviation authorities, such as the Federal Aviation Administration (FAA) in the United States. It is often necessary for insurance purposes.
- For the seller, it offers legal proof that they have relinquished ownership and, with it, the responsibilities and liabilities associated with the aircraft.
The aircraft bill of sale is an indispensable component in the sale process, ensuring that all legal, regulatory, and administrative requirements are adequately met.
How Do You Change Ownership of a Plane?
Before giving the buyer the keys and bill of sale, the seller must:
- Remove the original aircraft registration certificate
- Complete the sale information on the certificate and mail it to the FAA registry in Oklahoma City, OK
- Remove the FCC radio license with the seller’s name (if any)
- Provide any logbooks and records to the buyer if agreed to
- If the buyer is a foreign national, the N-number must be removed (painted over or stripped) from the plane before the transfer
What Forms Do You Need to Sell an Aircraft?
The FAA requires buyers to submit several specific forms when registering an aircraft for the first time.
All these documents may be obtained by downloading them from the FAA website.
- Aircraft Registration Application (AC Form 8050-1)
- Aircraft Bill of Sale
- The current owner should provide an airworthiness certificate, but the new buyer must submit an Application for U.S. Airworthiness Certificate before registering the plane.
In addition, you should have a purchase and sale agreement.
This is the sales contract, not a bill of sale. It should include the pre-purchase inspection, whether the aircraft is being sold “as-is” or if there are warranties of merchantability, and other terms and conditions.
Pilots’ associations caution private buyers and sellers against drafting their purchase and sale agreements. These contracts are complex and should be outlined, or at least reviewed, by a contract attorney.
Corporate or LLC purchases have different documents and submission requirements to register a plane. Corporate buyers should contact their attorneys before making an aircraft purchase.
How To File an Aircraft Bill of Sale
Step 1 – Negotiate the price of the airplane
Negotiating the price of a private airplane involves carefully assessing several factors to ensure you are making a wise investment. Here are key points to consider:
- Market Research: Understand the current market value of the aircraft type you’re interested in. Prices vary based on make, model, age, and market demand. Use resources like aircraft sales listings, trade publications, and valuation guides to understand fair market prices.
- Aircraft Condition: The overall condition of the aircraft is a significant factor in its value. Look for signs of wear and tear, the condition of the interior and exterior, and any signs of corrosion or damage.
- Maintenance and Logbooks: Review the aircraft’s maintenance history and logbooks thoroughly. Regular maintenance and clear, complete logbooks indicate a well-maintained aircraft and justify a higher price. Missing entries or gaps in maintenance records can be a red flag and a point for price negotiation.
- Total Time and Engine Hours: Check the total airframe and hours since the engine’s last overhaul. Aircraft with lower total time and engines closer to the beginning of their lifecycle may command higher prices. High-time aircraft or engines nearing overhaul can be a point to negotiate a lower price.
- Avionics and Upgrades: The type and condition of the avionics and any upgrades done to the aircraft can significantly affect its value. Modern, well-maintained avionics are desirable and can increase the aircraft’s price. Outdated or non-functional equipment can be a negotiation point for a price reduction.
- Pre-Purchase Inspection: Arrange for a pre-purchase inspection by an independent, qualified mechanic or inspector. This inspection can uncover issues that may not be obvious but could require costly repairs. Use the findings from this inspection in your price negotiations.
- Operating Costs: Consider the operating costs, including fuel efficiency, insurance, storage, and maintenance. An aircraft that is less expensive to operate may justify a higher purchase price.
- Market Timing: The timing in the market can influence aircraft prices. During a buyer’s market, you may have more room to negotiate. In a seller’s market, high demand might limit negotiation leverage.
Consider hiring an aircraft broker or consultant who can provide expert advice and negotiation assistance. They can help evaluate the aircraft and ensure a fair deal.
Step 2 – Fill out a Bill of Sale
Once you’ve done your due diligence, you’ll want to fill out two originals of an Aircraft Bill of Sale form—since one must go to the FAA with the registration. Here’s what you have to fill out and in what order:
- Date of Sale
- Buyer’s name and mailing address
- Seller’s name and mailing address
- Aircraft information – manufacturer, model, year registration, and serial numbers
- Agreed purchase price
- Agreed date of delivery
- Deposit amount due at time of purchase (if any) and whether non-refundable or refundable
- Number of days for an inspection period
- US state or territory where the transaction is happening
- Signatures and names of the interested parties and witnesses.
Step 3 – Gather additional documents
In addition to the bill of sale, you may need other documents, such as the aircraft’s current registration and a release of lien if there was a loan against the plane that has been paid off.
Step 4 – Register the plane to the FAA
The buyer must send the following documents to the FAA for registration:
- the Aircraft Registration Application (AC Form 8050-1)
- evidence of ownership (such as aircraft bill of sale)
- the $5 registration fee made payable to the Federal Aviation Administration
The aircraft registration application must include all new owners’ printed names and signatures. If the owners are part of a company or business, their signatures must include their titles or positions.
Send the completed forms, the fee, and any additional required documents to the FAA Aircraft Registration Branch. The mailing address is:
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By US Postal Service – FAA Aircraft Registration Branch, P.O. Box 25504, Oklahoma City, OK 73125-0504
By Commercial Delivery Services –FAA Aircraft Registration Branch, Registry Building Room 118, 6425 South Denning, Oklahoma City, OK 73169-6937
If you have additional questions, contact the FAA Aircraft Registration Branch at (866) 762-9434, Monday through Friday, 7:30 AM to 4:00 PM Central Time.
If you need a form for creating your bill of sale, use our downloadable aircraft bill of sale. It contains all of the information the FAA requires in one easy-to-complete document.
How Do I Modify an Aircraft Bill of Sale Form?
The information on the bill of sale must match the information on the registration. If you need to correct it or other documentation related to your registration, fill out the Aircraft Re-Registration Application Form on the FAA website.
Aircraft Bill of Sale Sample
