Indemnify Seller Clause

[isosceles]

Originally Posted by Dugaru

Not sure how that would work, but I'm all ears.

It's just an idea. An LLC purchases the airplane and sings whatever the indemnity agreement the seller wants. After that the LLC sells the airplane to your without any tricky clauses. Now only the LLC is on the hook. Good luck with that.

Technically, it's easier just keep the airplane in the LLC forever, as many owners do, but you will need to pay LLC fees each year

[Pilot135pd]

Originally Posted by Dugaru

That is a genuine denial of coverage for a BS violation of the FARs, I'd say.

There was NO violation of the Regs. That?s why the FAA gave me a letter for court. That didn?t stop the insurance company from denying coverage. My point is they?ll do it and it?s up to you to figure out why they shouldn?t.

[Dugaru]

Originally Posted by isosceles

It's just an idea. An LLC purchases the airplane and sings whatever the indemnity agreement the seller wants. After that the LLC sells the airplane to your without any tricky clauses. Now only the LLC is on the hook. Good luck with that.

Yeah, holding a number of other issues to the side, as a practical matter I don't think many sellers would agree to that.

Originally Posted by isosceles

Technically, it's easier just keep the airplane in the LLC forever, as many owners do, but you will need to pay LLC fees each year.

True. And of course the LLC doesn't provide any protection to a pilot operating the aircraft, even if the aircraft is at all times owned by the LLC, since the pilot will always be personally on the hook for allegedly negligent conduct.

[Dugaru]

Got it. Definitely "aggressive" for the insurance company to deny coverage in those circumstances. A really useful real-world data point, there.

Originally Posted by Pilot135pd

There was NO violation of the Regs. That?s why the FAA gave me a letter for court. That didn?t stop the insurance company from denying coverage. Muy point is they?ll do it and it?s up to you to figure out why they shouldn?t.

[Ted RV8]

Just my two cents.

I don’t think anyone has successfully sued and won a case. Do know of a couple stories where the builder got sued but won the case. They had to pay attorneys fees to defend themselves and that was in the 40 to 50k range.

Not sure what I will do if and when the time comes to deal with mine. Maybe lawn art!

True story of a gentleman in Northern California with an RV6 about ten or fifteen years ago. Upon the advise of his attorney he sold the engine, prop, and avionics. Then cut up the plane for scrap.

[Sam Buchanan]

Originally Posted by Ted RV8

True story of a gentleman in Northern California with an RV6 about ten or fifteen years ago. Upon the advise of his attorney he sold the engine, prop, and avionics. Then cut up the plane for scrap.

See post #8 in this thread.

[Flyer2017]

"I'm in the process of purchasing an RV12 from a person who purchased it from the builder. The seller has been conducting his own annual condition inspections."

So the seller is the second owner of the plane and therefor not allowed to sign off the condition inspection for the plane? If that is true, the plane has not received a legal condition inspection for as long as the seller has been signing them off. If he didn't build the plane and isn't an A&P, he can't legally do a condition inspection without the participation and sign off of an A&P. You have no idea of the condition of the plane and the seller wants you to take any liability for his work. Without on heck of a thorough inspection by a DAR who is a builder and an A&P, I'd move on. Quickly.

[rv9builder]

Originally Posted by Flyer2017

So the seller is the second owner of the plane and therefor not allowed to sign off the condition inspection for the plane? If that is true, the plane has not received a legal condition inspection for as long as the seller has been signing them off. If he didn't build the plane and isn't an A&P, he can't legally do a condition inspection without the participation and sign off of an A&P.

What you say is true if the -12 is registered E/A-B. If it?s an ELSA, the second owner can take a course and be eligible to sign off on condition inspections for that particular airplane. If he/she hasn?t taken the course, they can?t sign off on condition inspections.

[rv8ch]

This has been discussed several times. I think the decision is easy - if you are worried about this risk, and if you have enough money to be an attractive target, just don't sell the aircraft - 100-150k is not much money for you.

If you feel that 150k is a lot of money, you probably won't be that attractive of a target.

Obviously these are rough numbers - everyone's number will be different.

[isosceles]

And don't forget to put your house into an irrevocable trust!