Prebuy conflicts of interest

claude

Folk,

I am close to purchasing an aircraft (Piper Arrow II) and trying to figure out the best way to complete a prebuy....

The aircraft is located approx 800 miles (5-6 hour flight in Arrow) from where I live, and has been maintained for over 10 years (including latest annual last year) by the maintenance shop at the airport where the aircraft is parked. Anyway, the owner has lost his medical and cannot fly the aircraft to another airport, and the aircraft is no longer insured for flight (only non moving hull insurance). Meanwhile, the nearest airport with prebuy facilities is about a 30 minutes flight away.

I am trying to see if I can locate an instructor / ferry pilot with their own insurance to fly the aircraft to / from the other airport's prebuy facilities - and get a cost estimate. I am also trying to see if I can convince the owner to let me fly the aircraft to my home airport (with my instructor) for a prebuy - I need an instructor to do some refresh time and complete an insurance check ride anyway! Of course, the owner is trying to convince me to use his shop for the prebuy!

Any thoughts on what conflicts of interest this may cause?

Is it a definite NO NO having the prebuy done by the shop that maintainsthe aircraft? Or is it 'OK if you get the following agreement / conditions'? I would like the latter, but suspect the truth is the former! Right now with a remote prebuy I am expecting an additoinal 500 bucks for ferry to / from - the pilot needs a car rental to get back home and then return the next day to pick up the aircraft! Meanwhile, I have found an independent aircraft mechanic in the area, but he needs the shop facilities of the company that maintains the aircraft, and they (quite rightly) want to charge for one of their mechanics to 'shadow' my mechanic, and so the price of the prebuy doubles!

I am a (hopefully) first time owner, so any thoughts / insights are welcome?

flashf16

Claude, this is a buyers market and that's way too much time/effort/money for an airplane that there are a lot of. I would tell the seller 'adios'.

Ryan

CSkup

Claude:
If you check the earlier posts you will see I just bought a Cherokee 6. The buyer insisted I ues his mechanic. I rejected this. My Pre-buy Mechanic showed a number of questionable repairs performed by the seller's mechanic. In short the seller's mechanic had signed off on the annuals and repairs. He had to defend his work. Its better to get an independent evaluation. I'm spending about $8,000 on repairs, but I knew that when I purchased the plane and negotiated the purchase price accordingly. I don't know if its a conflict of interest, but I believe it would not be wise for the seller's mechanic to do YOUR Pre-buy. Chuck

Avionics-tech

I would get an AME who has a mobile service do the pre-purchase. That way you don't need the other shadow AME. If the aircraft has a lot of Avionics, get a pre-purchase on that as well. You don't want any surprises. Remember, you're the customer. You make the conditions.

claude

Excellent answers, great web site, thank you...

The seller is now offering me a New Annual with the aircraft, done by the same shop that has been maintaining the aircraft for 7 years. From my understanding, an annual has a legal element to it, while a prebuy is only as good as the mechanic that does it? A 'botched' annual can have legal / business ramifications for a shop, while a bad prebuy can at most get an apology!

Unfortunately, I can't be there when the annual is performed, but I can insist on seeing the full shop report, and could add conditions on 'no major squawks over 1000.00' identified.

Additional thoughts?

CSkup

Forgive my skepticism. Unfortunately, there are some AI that run their business in a shoe string and carry no insurance. I have heard some AI may sign your annual off for a fee and not do the work. Therefore, it is important who does the Pre-buy or annual. I believe both annuals and Pre-buys have legal implications in the US. The AI is charging you and representing that that aircraft meets certain AD's, is in an airworthy condition, and any visible problems have been identified. My Pre-buy AI said he could complete the annual for a few dollars more. In my Pre-buy he removed the head to check ( I think ) the cam shaft. My Pre-buy cost about $2700 and some issues were still missed. Do yourself a favor and get an independent evaluation.

flyguydon

An annual can be anything. An IA can pencil whip it. The only legality is if someone gets hurt or dies from something... that IA gets sued, perhaps charged... loses his IA. If something turns up later that is just obvious was already wrong when you bought it... you are likely out of luck.

I personally own an Arrow II. Very familiar with PA-28s... If you are anywhere near Jacksonville FL, I can do a pre-buy. We can even make it into an annual. Let the seller pay for it. See, if they offered you an annual... he was going to pay... or they were going to pencil whip it. I will not pencil whip it. "You can't buy life".

Don

Jim Wells

Be careful with the insurance. If you find and instructor, etc., with insurance it most likely only provides liability insurance for the instructor, i.e., if the plane is damaged while in motion the insurance will protect the instructor for his/her liability for the damage. If the accident is not their fault the hull will have no coverage. The current owner needs to add in motion hull coverage before he lets anyone fly the plane. On the other hand, if you execute a purchase agreement you need to make sure you have adequate insurance on the plane before you, or anyone else, flies it. How many times have we read of a plane totalled during the purchase process. Be careful.

DavidB

I would get the fresh annual and be done with it. You can fly it home at that point and let's face it, you will want to make it your own plane later anyways. Life is too short, trust the A&P.

kentshaw

I would tend to agree with DavidB. You just do not have many viable options. A flight instructor is unlikely to fly the plane anywhere unless you have a ferry permit from the FAA or a current annual inspection. His insurance is likely not good when he flies a plane with no current annual inspection because it is technically unairworthy. An A&P is required to signoff on a ferry permit that the plane is airworthy. Most will not do that without doing an annual inspection. I would just go with the locally completed annual and factor the risk into my offering price.

ecase727

I agree with Kent, there is really no way to move this aircraft (in annual or not) without insurance if you or the seller are not willing to just take the risk. So you have 3 choices.

1. Walk away and find another one, but if you really want this aircraft.

2. Have the local shop sign off a fresh annual, fly your airplane for a year, and take your chances. There is really no legal recourse unless you want to spend a lot on money on layers if something comes up later. Make an offer accordingly.

3. Or my suggestion, higher a rep, an A&P or IA from you local or other area and pay his expenses to go to the aircraft and observe the annual, kind of what Avionics-Tech suggested. Have the local shop do the annual and labor, the sellers pays for that, your rep is on hand to see what goes on. He is not going to touch the aircraft, just “shadow” the shop, this is kind of the reverse of your fist option. If something comes up, your rep can flag it, everything stops till is sorted out and you have no exposure other than the reps expenses. I would not recommend trying to hire an independent from the seller’s local area, if the work is being done in a shop, you have direct competition there and may cause problems you don’t need, or maybe not? There is no guarantee that something will not come up later, but you have peace of mind. I think this would be the best of both worlds as you get a fresh annual for the next year at the sellers expense, but the price will need to reflect the seller paying for a fresh annual as your pre-buy.

If the seller or the local shop will not agree to this, then back to option 1 or 2.

That’s my 2 cents worth.

bigandy

Some great points have been made already.

Perhaps a simple compromise - since you are talking about an Arrow II, then the plane probably is no newer than a 1976 model year (guessing), then you would want to be looking at it's 36+ year history. If you are really interested in this plane, I would consider sending your own A/P IA to review the plane.

A plane can be viewed in a few components:
[ul]airframe
engine
prop
avionics
interior
exterior (paint, speed mods etc).[/ul]

I personally think that the most important thing is to get a good airframe, since all of the other items are replaceable (at a cost).

So why not hire an A/P IA to visit the plane, take a really good look at the fuselage for it's maintenance state, then a good look at the engine. He/she could then report back to you with a summary of Airworthiness Directive (AD) compliance, and if there has been any repair history, if there is any corrosion and the general state of the plane. If all is well, make an offer and go get the plane with an instructor (since it sounds like you will need some dual time to meet insurance/personal levels with the plane).

Then, fly the plane - get a feel for what you would like to change (if anything) and enjoy the fun of plane ownership.

When buying a new or second hand vehicle, it's inevitable that there will be some maintenance issue - hopefully small, that will need your attention. It's prudent to have a reserve fund to address these issues - it's a bit like having to replace a flat tire on your car since ran over a nail When I bought my Cherokee 6 in 2001, I knew that I would be investing in new avionics, this also turned out to be a new altitude encoder, ELT, followed by a turn coordinator. It wasn't the end of the world in terms of finances, but it did welcome me to the world of plane ownership. The more you fly your plane, the more understanding you have of the plane, and the confidence and enjoyment of the plane grows.

Good luck!