Recently, I was working with an FBO client of mine drafting a hangar lease. I drafted a lease that included fairly one-sided provisions regarding insurance, indemnification, limitations of liability etc. (all standard provisions to protect a landlord’s interests). After reviewing the draft lease, the client asked “What if an aircraft owner does not want to sign the lease with those provisions?” My not-to-helpful, lawyerly answer to that general question was “It depends.”
An aircraft hangar lease is a contract. Contracts are agreements between parties. Sometimes they are negotiated quite extensively, and other times they are “take it or leave it” with little or no negotiation. In this case, my answer to the client’s question was appropriate because it depends upon whether the client is willing to negotiate, and possibly remove some of the terms of the lease, or whether the FBO wants to retain all of the protections of the lease as drafted without any negotiation.
If the latter, then my answer is that the aircraft owner must sign the lease “as-is” or the FBO shouldn’t rent the hangar to that owner. If the former, then the FBO needs to understand what each provision of the lease is meant to accomplish in order to determine from a business perspective whether it is willing to accept additional risk by deleting or revising certain provisions at the request of the aircraft owner.
In the end, the FBO and the aircraft owner will either agree to terms or they won’t. Whether this occurs as a result of negotiation or on a “take it or leave it” basis is up to the FBO who has the hangar space.
