Leases, Liability, and the Paperwork That Protects Your Pilot Certificate

For most pilots who share or lease an aircraft, the biggest threat to your certificate isn’t a bad landing - it’s a bad piece of paper. A recent AOPA analysis on leases and liability makes the case that written agreements, the correct lease type, and matching insurance are what stand between you and financial or regulatory disaster. Get any of the three wrong, and a single flight can end in enforcement action, an uncovered repair bill, or a fight with a probate attorney.

Why Aircraft Lease Agreements Matter More Than Anything in Your Flight Bag

Odds are you don’t own your airplane outright. You might be in a flying club, one of three or four names on a partnership, leasing a Cessna 172 back to a flight school, or renting from an owner down the row who wants to offset his hangar bill.

Every one of those arrangements is a lease of some kind - whether or not anyone ever printed and signed a document.

That’s the first trap: the handshake deal. Two friends split an airplane on goodwill and a shared checking account, and everything works beautifully right up until it doesn’t.

One partner stops paying his half of the annual. One partner puts a hard landing on the nose gear and disappears. One partner passes away, and his share now belongs to an estate - leaving you to negotiate over your own aircraft with a probate attorney who has never sat in a cockpit.

A written agreement is what stands between you and that chaos.

What a Good Aircraft Sharing Agreement Actually Does

A solid agreement isn’t glamorous, but it protects the flying. At minimum, it should spell out:

• Who pays for what - fuel, oil, and the engine reserve (often around $50 an hour) that nobody wants to fund until a cylinder cracks.
• What happens when someone wants out of the partnership.
• The rules for scheduling and shared use.
• Who has final say on maintenance decisions when the mechanic finds something expensive on the annual.

None of that is exciting. All of it protects the passion that got you into aviation in the first place.

Dry Lease vs. Wet Lease: The One Word That Can Cost You a Certificate

When you operate an aircraft, you are exposed to liability - that’s the reality of moving a machine through the sky over other people’s property and lives. If something goes wrong, the question is always the same: who is responsible, and who pays?

AOPA has hammered for years on one distinction owners get wrong: the difference between a dry lease and a wet lease.

A dry lease means you hand over the aircraft and nothing else. The person leasing it provides their own crew, arranges their own fuel, and takes operational control.

A wet lease means you provide the aircraft and at least one crew member - typically the pilot - along with it.

That single word matters because it can be the line between operating under Part 91 and accidentally running an illegal charter operation under Part 135. If you lease your airplane to someone, provide the pilot, and money changes hands, the FAA may view that as a commercial operation you are not certificated to run.

That’s not a minor paperwork violation. It’s the kind of finding that costs certificates and triggers enforcement.

If you’ve ever considered leasing your airplane to a business, an LLC, or a fellow pilot for compensation, understand which side of the dry-versus-wet line you’re on first. When in doubt, talk to an aviation attorney before the first dollar moves - not after.

Why Your Insurance Policy Has to Match Your Agreement

Here’s a scenario that has ruined more than one friendship. You own the airplane, you let a buddy fly it, and he bends it. Then you both discover your policy only covered named pilots - and his name was never on it.

Now the airplane is damaged, the insurer walks away, and the two of you are staring at a repair bill with no coverage behind it.

Your lease or club agreement and your insurance policy have to talk to each other. That means paying attention to open pilot warranty clauses, minimum hour requirements, and named insured status for every partner.

If the paper says one thing and the policy says another, the policy wins - and you lose.

Three Steps to Protect Yourself, Your Aircraft, and Your Certificate

1. Get it in writing. If you share an airplane in any form, use a real agreement - not a text thread. AOPA offers resources and sample documents for members for exactly this purpose.
2. Know your lease type. If you’re leasing an aircraft out, understand dry versus wet, and know where Part 91 ends and Part 135 begins.
3. Make your insurance match your reality. Read the policy, know who’s covered, know the minimums, and confirm every person who touches the yoke is named or clearly qualified under the open pilot provision.

You wouldn’t skip the runup. Don’t skip the paperwork. For details specific to your situation, read AOPA’s full piece on leases and liability.

Key Takeaways

• Any shared aircraft arrangement - club, partnership, or leaseback - is a lease, and it needs a written agreement covering costs, exits, scheduling, and maintenance authority.
• A dry lease provides only the aircraft; a wet lease provides the aircraft plus crew. Providing a pilot for compensation can push you from Part 91 into illegal Part 135 charter territory.
• Getting the lease type wrong can trigger FAA enforcement and cost you your certificate - not just a fine.
• Insurance must match your agreement: verify named pilots, open pilot warranty clauses, and minimum hour requirements before anyone else flies your airplane.
• Consult an aviation attorney before leasing your aircraft for compensation, and review AOPA’s member resources for sample documents.