VERY IMPORTANT Hangar Reversion (Lease/ownership) Language FAA

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More good news for the aviation community. On the heels of the California legislation that clarified the FAA’s language stating a hangar can be leased for longer than 50 years, (just no single lease term for greater than 50 years without FAA approval), please see the following ruling on public enemy number one, REVERSION ! Thanks to AOPA and Brad Schuster for the heads up.

Subject: This just in from AOPA General Counsel RE: Part 16 Ruling expressly confirms that reversion is NOT a required means to terminate a lease and therefore, not reverting is NOT a violation of FAA compliance

In this complaint from a former part time airport manager against the city he worked for (as I read it), he felt that because the City was not enforcing or requiring reversion, the City was in violation of grant assurances. The findings and conclusions of this Part 16 complaint make abundantly clear that the FAA does not require reversion. Period.

16-05-19 Clarke v. City of Alamogordo. The Complainant alleged that failure to invoke lease reverter clauses violated a variety of grant assurances. The Director’s Determination has some great language, including:

Grant Assurance 5, Preserving Rights and Powers. FAA does not construe Respondent’s refusal to invoke its reverter provisions and claim improvements on airport property, as a donation. Nor are such acts necessarily a violation of Grant Assurance 5… Complainant may contend that failure to enforce the lease amounts to a donation, however refusal to invoke the ‘reverter clause’ provisions is not a violation of the FAA Grant Assurances. Therefore, with regard to Respondent’s refusal to invoke the reverter provisions in its aeronautical leases, FAA finds that such action was a decision within the right of the Airport and the parties to the contract, and not a violation of Grant Assurance 5.
Grant Assurance 22, Economic Nondiscrimination. Alamogordo appears to have treated the tenants the same because it has not exercised the reverter clauses… Therefore, based on the analysis above, Respondent is not in violation of its obligations under Grant Assurance 22.
VIII. Findings and Conclusions.

i. Respondent’s failure to invoke the reverter provisions in its aeronautical leases does not constitute a violation of Grant Assurance 5, Preserving Rights and Powers.

ii. Respondent’s failure to uniformly include and enforce ‘reverter’ provisions in its aeronautical leases does not constitute a violation of Grant Assurance 22, Economic Nondiscrimination, since Respondent never enforced the reverter provisions on any of its aeronautical leaseholders.

iii. Respondent’s failure to invoke ‘reverter’ provisions and charge fair market value rent for reverted aeronautical leasehold improvements is not a violation of Grant Assurance 24, Fee and Rental Structure.

iv. Respondent’s failure to invoke ‘reverter’ provisions in its aeronautical leases does not constitute a prohibited use of airport revenue or revenue diversion, and does not violate Grant Assurance 25, Airport Revenue.

Hope this helps!, Brad Schuster

Northwest Mountain Regional Manager

Aircraft Owners & Pilots Association (AOPA)

Tel: 202.851.7502

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https://www.aopa.org/news-and-media/all ... ion-policy#

[Rich]

https://www.aopa.org/news-and-media/all ... ion-policy#

Thanks for forwarding this. Nearby Bend airport (KBDN) is one of those mentioned and is currently at odds with virtually everyone based there over this and a number of other requirements the city has decided to incorporate into requirements for various entities based there.

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https://www.aopa.org/news-and-media/all ... ion-policy#

A candid reflection on FAA aircraft hangar leases and hangar reversion policy
March 21, 2024 By AOPA Government Affairs staff

While the FAA offers extensive guidance for airport administration policy, particularly in terms of airport compliance, all too often there is much left to interpretation by both airport sponsors and airport users.

Clarification as to the content of the AOPA link provided yesterday above.

Please forward this link on any other aviation related forums etc. that you might participate.
The Aviation community at large would benefit greatly for having access to this AOPA commentary !!