Rules and Regulations Section of a Lease Provides Protection

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Part Four of the Four-Part Crafting Advantageous Hangar, Office and Tie-Down Agreements Series

By John L. Enticknap and Ron R. Jackson, Principals, Aviation Business Strategies Group

In our previous blog, we wrote about developing a tie-down agreement as the third post for our series about crafting advantageous hangar, office and tie-down agreements, which together are the third component of the six intangibles that can build equity in your FBO.

In this final post for the series, we discuss the rules and regulations section of crafting these types of agreements.

The rules and regulations section should not be taken lightly as it provides the language that spells out the expected performance of both the leasee and lessor. Therefore, it can be viewed as protection should one of the parties in an agreement default in some way.

Here are few tips to keep in mind when writing and adopting a rules and regulations section as part of a hangar, office and/or tie-down agreement:

  • It’s important to stipulate in all agreements that aircraft, either in a hangar or a tie-down area, must be in airworthy condition. This includes keeping tires inflated and keeping the aircraft free from other obvious maintenance issues. Be sure to include language regarding aircraft maintenance. Do not allow maintenance on the aircraft unless you authorize the specific maintenance to be performed in writing.
  • Your tenant should have aviation liability insurance coverage. We recommend at least $1 million in coverage. Your agreement should also include a good indemnification clause for your protection.
  • If your tenants expect to drive their vehicles onto the ramp, they should have to comply with the airport’s safety and security requirements as well as your FBO training and insurance policy standards. Aircraft towing movements should be restricted to trained FBO personnel only.
  • Tenants are subject to the terms and conditions of your FBO master lease. Therefore, when you draft an agreement, include language that covers this requirement. Specify that any fueling of aircraft is restricted to being performed solely by your FBO. Also, hangar and office tenants should be apprised of any regulations concerning controlled access points for guests or other visitors.
  • Spell out what specific services tenants will receive. Office tenants should not expect the FBO to provide free office services such as copy, fax, phone answering, etc. This section should also have specific language regarding normal operating hours and restrictions for setting up on-site living accommodations. Hangar and office tenants should also be made aware in writing of any restrictions regarding pets/animals on the premise.

There are many factors and nuances to developing a rules and regulations section of a lease that we will not be able to cover in the blog. Therefore, we encourage you to attend one of our FBO Success Seminars where we spend additional time discussing these important topics as well as others, in addition have your legal counsel review your agreements.

Please Share your comments in the space below.

About the bloggers:

John Enticknap has more than 35 years of aviation fueling and FBO services industry experience. Ron Jackson is co-founder of Aviation Business Strategies Group and president of The Jackson Group, a PR agency specializing in FBO marketing and customer service training. Visit the biography page or absggroup.com for more background.

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