Buying an aircraft has one specific feature that you practically don't have to deal with for other types of property: even a perfectly written contract does not in itself lead to a change of owner, if you do not close it and do it correctly. For aircraft registered in the aviation register, a simple but fundamental rule applies:
Ownership arises only upon registration in the register, not upon signing the purchase contract.
In practice, it's a difference that could cost you millions.
What must a purchase contract cover?
First, a little context. An aircraft sales contract must be in writing and is never just about the price and two signatures. To make the transaction secure, it must address several areas:
1) Aircraft identification
Serial number, model, year of manufacture, registration. Older machines often have inconsistencies in the documentation, which can complicate registration.
2) Purchase price and its settlement
Aircraft are usually financed by the seller's bank. It is therefore necessary to clearly set out how the loan will be repaid, when the aircraft will be "released", and what the exact interaction between the bank, the buyer and the escrow is.
Escrow plays a key role here — it allows the bank to pay a portion of the purchase price and release the rest of the purchase price only when it is certain that the buyer will actually acquire ownership.
3) Aircraft handover
When, where and in what technical condition. Including the results of the pre-sale technical inspection, which is completely standard for older aircraft.
4) Seller's guarantees
Whether the aircraft is not crashed, not pledged, not subject to leasing, has complete documentation and is fit for operation. It is necessary to check and agree whether the aircraft is sold "as is where is", i.e. (although this is not entirely accurate) as it stands and lies, or whether the seller provides any guarantees for its technical and legal condition. For flown aircraft, the transfer in the "as is where is" mode is relatively common, however, even here it is necessary to demand at least a guarantee for the legal integrity of the aircraft.
5) Withdrawal conditions
What happens if a major technical or legal defect is discovered during the inspection?
That's the basics. But even the best contract isn't enough if the buyer makes one key mistake.
The only thing that matters is: until there is a transcript, you don't have a plane.
Airplanes are special because The transfer of ownership becomes effective only on the date of entry in the aviation register..
By signing the contract, the buyer's ownership does not ariseNot even the moment you pay the full purchase price.
This leads to situations that can be really unpleasant, both legally and financially.
What happens if the transcription is not done immediately?
These are not theoretical scenarios — it has happened many times:
- The seller will fall into insolvency.
The plane formally still belongs to him, so it will be included in the estate. The buyer, who has a contract and has paid, is outside the proceedings. - The seller will be subject to foreclosure.
The bailiff seizes the aircraft because the debtor appears as the owner in the register. - The aircraft is subject to liens or third party rights.
If the change of ownership has not been recorded, the liens still have “active” access to the aircraft. - The buyer cannot register the aircraft elsewhere.
Transfers between registries are sensitive — if an aircraft is not properly deregistered, it cannot be registered in the new country.
In other words:
Without registration, you don't own anything, even if you have a signed contract and paid.
What should a secure transaction look like?
The practical procedure we set up for clients usually looks like this:
- Technical and legal inspection of the aircraft.
Repair history, documentation, liens, financing, sanction regimes (essential for foreign aircraft). - Custody of the purchase price.
It protects both parties: the money is only released after precisely defined steps are completed. - Seller financing arrangement.
If the aircraft is grounded, the bank must be settled in a coordinated manner. - Preparation of documents for registering a change of owner.
- Entry in the aviation register.
Only here does the buyer acquire ownership. - Handover of the aircraft and receipt of documentation.
However, it is essential that the entire sequence of steps is legally and temporally aligned.
"First the contract, then we'll see" really doesn't apply to airplanes.
Timing is often the most important thing.
záver
A person buying an aircraft doesn't have to be a lawyer — but they should know that without a registry, the contract is only part of the story. A buyer who underestimates this detail could lose the aircraft before they even get in it.
Airplanes are not cheap and I think it is worth investing in quality legal services, the costs of which are negligible compared to the price of the airplane. In our office, we guide clients through transactions from due diligence to registration in the registry. And from our own experience, we know that in aviation law It's really better to leave nothing to chance.
We provide full-service legal support in the aviation sector. We handle everything from contracts to dealing with authorities so you can fly with peace of mind. Don't wait for a problem to arise.
JUDr. Ing. Jan Vych, attorney and partner
