Airport Business

MAY 2014

The airport professional's source for airport industry news, articles, events, and careers.

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LEGAL MATTERS 30 airportbusiness May 2014 By Megan E. Bryson, Esq. and Alison L. Squiccimarro, Esq. Subleasing Considerations for FBO Operators Four simple steps to follow when subleasing property to subtenants Landlord-tenant laws and attendant lien rights vary from state to state, making them less than predictable, especially in the absence of a written contract. To this end, and to confer some predictability in the event that such a relationship sours, it is imperative that FBO operators have written agreements with all subtenants, ranging from general aviation tie- down customers to corporate flight department subtenants who lease an entire hangar. These written contracts should address, at a minimum, the issues discussed herein to ensure proper allocation of risk. 1. M A K E S U R E T H AT Y O U R SUBLEASE IDENTIFIES THE CORRECT PARTY This may seem an obvious point, but we see this issue in practice time and time again. Ensuring that you have the correct entity will increase the chance that your subleases are enforceable and may allow you to lien your subtenant's aircraft if you are in a jurisdiction where same is permitted. A lien against an aircraft is frequently an FBO operator's primary means of recovery for outstanding hangar rent, tie-down fees, and/or maintenance costs. First, you want to confirm that the entity with which you are contracting was validly formed, is in good standing, and is authorized to do business in the state in which you are located. This can be checked by running the entity's name through the database that is (generally) available on your state's Secretary of State website. After you have confirmed that the entity is validly formed and authorized to do busi- ness, you want to confirm that it is the entity that actually owns the aircraft (if there is one at issue). Many aircraft owners, particularly I n the earlier articles in this series, we discussed some of the more common grant assurances that are disputed as between airport sponsors and tenants; preserving your own documents and evidence, as well as seeking out evidence from your adversaries; and the legal remedies available to an airport tenant under the Code of Federal Regulations. Our next articles focus on some of the more practical and everyday considerations for FBO operators with respect to increasing leverage when relations with subtenants become difficult. This article focuses on providing the fixed based operator with key terms and provisions to include in subleases. airb_30-31_LegalMatters.indd 30 5/2/14 9:53 AM

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