Buying a HangAr

[GAHorn]

Thanks Johneeb - but I doubt that catch will help his humbleness. C'mon George even I know how to spell too!...

Quite right, Dave... as usual...I am misunderstood by you. John missed it too (also.) It was a JOKE!

[rhymes]

I built our 40' x 40' hangar a couple of years ago, and was troubled by the lease agreement, too. It stated that the City would own the hangar after the expiration of our 20-year lease, and that I'd have 90 days to get my dirty hangar off their property at that time, if I didn't want ownership to revert to them. I've been reassured that no one has failed to have their lease renewed at our airport (KSVE) since 1929; and the evidence backs up that claim. One 20-year extension oughta do it, after this one expires in 2028!
If that's not forthcoming, I'm stubborn enough to "move" it to another airport... hope my back holds out until my mid-seventies.

[GAHorn]

Be certain to properly insure your hangar against fire. Hangar fires are very troublesome. Not only to the insurance company that must pay you for your loss of the bldg.... but for the property owner who must clear away the burnt-out shell/rubble.

[AR Dave]

Well we're still going forward - got signature from owner (incarcerated), found proof that he owned the LLC listed as owner of property, sent a few thousand to the state for back taxes so that the Hangar is cleared to come back to local court, where I'll pay the last two years. Should be cleared to sell at that point.

Now I've got to deal with the always-thinking Airport Manager. He's a great guy, but just tinkers and tries to redesign stuff all the time. There are about 8 yrs expired on a 25 yr lease, 10 yr option. So he's come up with this idea that we can start the lease fresh but adjust for inflation (means doubling the lease payment) and then adjust it every 3 yrs or something. He's tried to double the lease amount on several others (not sure circumstance), but they've been able to show he can't do that. So he's baiting me with the fresh lease lure. I'm going to tell him no thanks - I'll just continue with the lease as is.

Can he force me to re-do the terms of the lease, of the property, that the building I'm buying is sitting on?
How do you change the name on that lease?
Like I said he's a great guy, but new to airport managing and figuring it out as he goes. He's trying to make the airport profitable. No leases have came full term at our airport yet.

[canav8]

Well we're still going forward - got signature from owner (incarcerated), found proof that he owned the LLC listed as owner of property, sent a few thousand to the state for back taxes so that the Hangar is cleared to come back to local court, where I'll pay the last two years. Should be cleared to sell at that point.

Now I've got to deal with the always-thinking Airport Manager. He's a great guy, but just tinkers and tries to redesign stuff all the time. There are about 8 yrs expired on a 25 yr lease, 10 yr option. So he's come up with this idea that we can start the lease fresh but adjust for inflation (means doubling the lease payment) and then adjust it every 3 yrs or something. He's tried to double the lease amount on several others (not sure circumstance), but they've been able to show he can't do that. So he's baiting me with the fresh lease lure. I'm going to tell him no thanks - I'll just continue with the lease as is.

Can he force me to re-do the terms of the lease, of the property, that the building I'm buying is sitting on?
How do you change the name on that lease?
Like I said he's a great guy, but new to airport managing and figuring it out as he goes. He's trying to make the airport profitable. No leases have came full term at our airport yet.

Although I am not a lawyer and you should consult one for piece of mind as previously stated.

First you will need to consult the current lease that you trying to assume. Look for language that allows the transfer of right title interest to another. Some city and county real estate departments have got wise to the sale of hangars at airports and are now restricting its transfer under certain terms. BE CAREFUL! Assuming paying taxes for another does not grant you entitlement unless you file a lien against the property and you exercise a quite deed on the property after three years.

Second, a bill of sale from the previous owner stating that he is the managing member of the LLC, or the sole registrant of the LLC of the defunct LLC with case number available through the Secretary of State. Make sure the ex wife was not married to him during the ownership term. Most states are community property and no matter how much your friend entitles you to the hangar she still can get half!

Third, the bill of sale must state he is transfering: right, title,interest and most importantly right to occupy with the sale of this hangar to you. That will transfer the remainder of the lease with its current terms. This is what the airport manager does not want you to know for the reasons you stated. I have done a few hangar leases in my time.

I hope these examples would be enough reason to get a lawyer to help. Just trying to help protect your wallet walking on the edge of this money pit! Doug

[lowNslow]

Although I am not a lawyer and you should consult one for piece of mind.

First you will need to consult the current lease that you trying to assume. Look for language that allows the transfer of right title interest to another. Some city and county real estate departments have got wise to the sale of hangars at airports and are now restricting its transfer under certain terms. BE CAREFUL!

As much as I hate having to use lawyers, this is good advice. It could save you a lot of hassle down the road.

[AR Dave]

Thanks Doug - I have most of that paperwork.
Guess I'll be gathering it all up for a lawyer soon.

[AR Dave]

So the lawyer said the only way I could get assurance that the IRS wouldn't confiscate the Hangar, would be to get them to put it in writing. Well I couldn't get anything from the IRS - could hardly even get a hold of anyone who'd talk on the subject. Even though the IRS had said, in court, they weren't interested in properties - I just couldn't believe that. My buddy, Hangar Owner, owes them millions. Well finally we decided to just take the chance - been 3 yrs.

Had a different lawyer prepare a bill of sale, brother of Hangar took it to him down in Louisiana. Couldn't get it through glass window - brought it back and mailed it ..... The day before the Bill of Sale comes back, my wife is down at the Court House. She does Title Searches for Foreclosures. She usually visits our Courthouse once a week. She just happened to overhear two guys talking and heard one mention an LLC of my Hangar Owner. There are several businesses by this name and she offered her help being familiar with the names and a research whiz. Haha it was the IRS Guy! Just happen to be looking for properties one being the Hangar. She told him we were buying it and told him the background. Well just like I thought - my buddy isn't getting the money, the IRS is. I now have an IRS Contact.

I have to come up with two things - Fill out a Release of Lien, which I downloaded. Lien is against buddy, so he sales it to me (I have bill of sale) and I pay the IRS the money he almost got. And the IRS guy wants a legit appraisal. Not sure how to go about this. How do you appraise the Hangar? I'm thinking value of what it would cost to build today and then prorate for years left on lease. I need a low appraisal. It's 60x75 - 4500 sq ft.

I have hangar cleaned up and there is plenty of room for any of you coming through Russellville, Ar..
Just had a Lear Jet in there for two weeks.

[Bruce Fenstermacher]

Now Dave, there is no way your landing on sand bars with that Lear. Though your fly out for a hamburger range is dramatically increased. Good thing you got rid of it.

[GAHorn]

if youre looking for lOw appraisals....its a mistake to be posting pics of lear jets parked in it.
call an MAI appraisal firm.

[AR Dave]

And MAI stands for?

[pdb]

MAI is a professional appraisal designation meaning Member, Appraisal Insitute. The cynical among us also refer to an MAI appraisal as "made as instructed."

[AR Dave]

Thanks Pete, I'll see if I can find them online!