cheque book building

[TechMan]

Would like to get some feedback and thoughts from people out there with regard to cheque book building and its consequences.

 

If you give someone an authority to build an aircraft from a kit or from plans and the pre flight finalisation form states that 'you' - the owner of the aircraft have built the aircraft and have signed the paperwork stating that fact, take delivery of the aircraft and find out after 100hrs plus that the build job was less than perfect and that numerous items need to be addressed.

 

You have chosen a cheaper engine, due to cost, which is overheating, modifications have been made which deviate from the plans and generally you are now so unhappy with the aircraft that you don't want to fly it anymore.

 

Do you take the issue up with RA-Aus and try and get justice because of dodgy workmanship and have the 'actual builder' canned? Remember that YOU, the owner, have signed a declaration stating that YOU have built the aircraft.

 

If so, what sort of response would you expect from RA-Aus?

 

Chris

 

 

[Wilfred]

I would think that there are two issues here

 

As there is really there is no such thing as cheque book building i would think that you are hiring someone to assist you in the work you are doing ie building the aircraft. as you have signed it off and approved the parts , materials engines etc as you went along you surely would only have yourself to blame.

 

if however you contracted someone to do some of the work as their individual expertise was required for that part of the project i would think that if any work was substandard or defective that you would have some comeback on that person and if they were contracted to do the work because of their RAA qualifications then in that instance i would think RAA would need to look at that contractor.

 

However you would have to think that any defective work would be picked up as you go along and sign off the work completed.

 

as far as engine choice i guess you would only have yourself to blame.

 

 

[Guest Fred Bear]

Interesting question.

 

If I were the cheque book builder (employer) and I was trying to cover myself, I would seek to enter into some kind of agreement with the builder of the aircraft with possibly a "warranty" of sorts attached to the build process. If the builder of the aircraft chose the components, ie. an undersized or overheating problem, then I would have some recourse if things went wrong within the warranty period. If I chose those components myself, then I would have no warranty claim on workmanship / architectural / aeronautical design.

 

I may choose to register my aircraft in either RA-Aus 95, or RA-Aus LSA, GA LSA or GA - this has nothing to do with the builder, so I would suggest that the RA-Aus has no interest whatsoever in this matter at all. What I, as the employer or owner tell the RA-Aus about the builder is irrelevant to the person that physically built the aircraft.

 

I would suggest that the only course of action would be to sell the aircraft, at which point "buyer beware" comes into play.

 

Telling the builder at 100+ hours is a bit rich too!

 

If it were a house and you contracted the builder to build your house from the plans and there were design floors, such as doors opening into other doors, nowhere for the Mrs. to keep her saucepans and the hotwater serviceis too noisy next to the master bedroom, then the owner can't touch the builder because he was contracted to "build" the house and was not responsible for the architectural design.

 

Just my educated 2 cents worth.

 

 

[Guest micgrace]

Hi Chris.

 

This is rather disturbing.

 

I'm of the understanding, if someone else builds the aircraft for you under 95.55 (experimental) it cannot be registered at all under any circumstances. I know USA is very strict in this regard. (51%)

 

Signing off as YOU built the aircraft, when someone else actually built it could very much come to the attention of courts under s300(1) and (2) ie production/use of false intrument with intent (max, 10 years, NSW) if pursued.

 

As to the peson who built it, without a production licence for the aircraft type, you would have to classify them as a amateur builder, but they are not building it for their eduction or personal satisfaction, but for $$ (Big problem)I suppose there is some other type of charge for that as well, when you are quite obviously not the owner, but built it(possible CASA rule?, pokey?)

 

But I'm no legal expert, and it really best left up to lawyers, courts and such to decide this problem. But, I suspect in such a case, this aircraft will never see the air again. which is really disappointing, but, rules are rules.

 

I suppose the point is you build it, only you can sign for it and register it. of course, then you can sell it. And, you can sell it part finished as well, so long as documented proof of the owner actually building is onsold as well. Then , the new owner could finish it, sign and register.

 

I'd imagine the RAA responsecould be to refer the matter on to the appropriate authorities and let them deal with it. "Ouch"

 

NB I'm trying to say something constructive here, any constructive comments welcome. esp those with aviation law knowledge.

 

micgrace

 

 

[Guest Guest]

I thought that I would add my 2 cents.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

 

To state that you built the aircraft when you did not is making a false statement. To do so to RAA for the purpose of aircraft registration is a commonwealth offence. If RAA was aware that this occurred/occurs, they would be bound to investigate and possibly implement more stringent measures to mitigate this for the future, as well as to refer the particular individual case to the AFP for investigation who might then (after investigation) refer the matter to the commonwealth DPP who may or may not choose to prosecute.

 

This scenario is interesting as it relates to a kit purchaser having the kit built, not by a professional (i.e. the factory that produced the kit) but by another amateur builder. I think that a more likely scenario, and perhaps more legally interesting scenario is one in which an amateur builder buys and constructs a kit, and then on-sells this completed aircraft to a pilot customer. Assume that under this arrangement there are no express warranties provided by the builder, nor does the builder have professionally recognised qualifications in relation to building the aircraft. My understanding of the law in relation to kit built aircraft is that the pilot customer in this scenario is buying the ‘used’ aircraft and is responsible for all issues of quality in relation to it (“buyer bewareâ€Â). Similarly the constructor has simply purchased a kit and built it for their own education and enjoyment, and then sold the aircraft.

 

At this point there are no real legal issues, but what happens where the builder is in fact buying kits and constructing them at the direction of pilot customers to whom the completed aircraft is being on-sold. This seems to fit within the legal framework of RAA regulations yet would allow amateur kit builders to establish aircraft building (kit assembly) businesses.

 

This allows there to be minimal quality control mechanisms (only the RAA inspection as required for all homebuilt kits) and potentially undermines the principle that the home built and kit built exemptions are based on, that is the voluntary assumption of risk by the pilot. True, the pilot is voluntarily assuming the risks of operating an aircraft built by another person, in the same way that home built aircraft are on-sold today, however where a pilot customer contracts with a person that holds themselves out to be a builder, and that person is known to have built numerous other aircraft, the pilot customer might reasonably infer that the aircraft will be built with a high degree of quality, and in fact rely upon that other person’s apparent experience and expertise. This may in fact mean that the ‘risk’ that the pilot customer is accepting in the final purchase of the aircraft is in his or her mind a lower risk. It may be possible for the pilot customer to sue the builder under tort law, but I think that it would be desirable for RAA to discourage this kind of practice (could simply impose a limit on the number of aircraft a builder is entitled to register in a year; this also encourages quality in that if a builder has built 10 kit aircraft in a year, it may be reasonable to infer that these aircraft may not have been built to a high standard).

 

In any case, an amateur builder would have to declare the ‘business’ income and pay tax on this if the construction and sale of the kit aircraft was in the nature of a business, irrespective of how the builder him or herself describes the enterprise.

 

 

[Guest Fred Bear]

The problem is that you can never stop someone who gets someone else to build it for them who is an experienced builder, beginner or a professional. The RA-Aus has absolutely no way of knowing this, other than what the inspector might pick up on; but that being said, many aircraft are inspected at a field and away from the build premises.

 

Even IF the feds or DPP got wind of it, they could never actually prove who did the bulk of the work. It's quite legitimate to have someone "help" you do the building, even if the owner is only the "foreman" or project manager.

 

It is well known that a company in Bundaberg (not Jabiru) is building aircraft from a kit to completion, the whole box and dice at the expense of the aircraft builder and the aircraft builder never attends the factory during the build process, but may choose to do so if he wants to. Their contracts must be air-tight to avoid these types of issues.

 

I would be interested to find out the stance of RA-Aus on this matter (above) as it seems to be clearly in breach of the 51% rule.

 

 

[Guest micgrace]

Hi,

 

I did some research on this item. It appears both may have committed an offence of strict liability. The definition on this, is the onus is on the person to 'prove" they followed the regulations. The matter is then referred onto the DPP by CASA.

 

Of course, if someone has the appropriate licences it's fine. But, if it's in some other category not 95.55, amateur built. But factory built and that's entirely different from this matter which clearly states the aircraft was built by the owner,for the personal education/enjoyment of the owner, to be registered under 95.55, amateur built.

 

The last thing the owner has to concerned about is poor workmanship, rather, better find a good lawyer real fast.

 

I'd be interested to know, how it goes, as this seems to a first type of case here.

 

Double ouch

 

 

[Guest Guest]

Just further on this issue; I think that this cheque book building potentially undermines the existence of the amateur built category as it ‘commercialises’ what is intended by the law to be amateur and for a pilot’s own education and enjoyment. I apologise if I have rambled a little.

 

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The issue with this Bundaberg company (as mentioned by Clem Brown above) constructing kits for pilot customers is that, apparently, the pilot is registering the aircraft as the builder when they are actually not. This is not legal (whether easily discovered and prosecuted is another matter). Arguably the building company is complicit in this as it would surely know that the pilot customer intends on registering the aircraft as the builder, although strictly speaking the company may not have breached any laws. To remove all doubt however, the company could register the aircraft itself as the builder (i.e. the company foreman or such an individual). Once registered, the aircraft may be sold to the pilot customer and he or she now has a kit-built aircraft without having to have built it themselves. On a transaction basis this seems to me to be identical to the way second hand kit built aircraft are currently sold.

 

The problem with this approach, as I said in my previous posting is that (I think) it undermines the very foundation of the exception to aircraft certification that allows homebuilt aircraft to exist. The principle that an individual should be free to experiment and build whatever flying contraption they desire, so long as they accept all of the risks associated with this is what allows the usual governmental protections with respect to aircraft standards to be waived in the instance of a homebuilder who accepts these risks. This is why commercial aircraft kits must comply with many forms of scrutiny for approval and sale (i.e. the ‘commercial’ aspect of the project) whilst the actual building requires very little adherence to regulation and approvals. Once this building aspect of the kit aircraft construction becomes subject to a commercial enterprise, the justification for the exception ceases to exist. Therefore commercial kit assembly enterprises undermine the very existence of kit aircraft.

 

Although what is occurring may be within the black letter of the law, it is clearly against the spirit of the law. I do not think it would take much to alter the law such that this kind of activity would be clearly illegal, although care must be taken in this regard not to inadvertently affect the used kit aircraft market.

 

 

[Guest pelorus32]

I've got a question for the more learned participants in this conversation:

 

Let's assume that the regs, as they apparently do, require the builder to be the owner and vice versa. Is there anything that prohibits the builder from sub-contracting elements of the build, so long as the builder takes responsibility for what has been done? As an example we have on this board a Jab that's being built and the builder has sub-contracted a couple of spray painters to spray paint the aircraft.

 

This is really analagous to the owner builder who builds a house only insofar as they are the nominated builder, even though all of the work may have been done by subs.

 

As for the point about ensuring that this doesn't become a de facto factory process without all of the safeguards that should be there: The motor vehicle dealers legislation in most states used to have a limit on how many cars a year you could sell without a license. This among other things prevented dealers from circumventing the warranty requirements. A similar limit could be created for kit built aircraft.

 

Regards

 

Mike

 

 

[Guest micgrace]

Hi

 

In my interpretation, there is nothing to prevent someone actually building an aircraft for someone elase , provided. 1. They register it in their name first. 2. Fly off the test period. 3. No more than one construct a year. Then fill out the appropriate paperwork to transfer the rego.

 

It is permissible to subcontract work, such as spraypainting so long as you constructed the majority yourself. eg at least assemble the fuselage/tailfeathers, u/c attach engine and such. so it adds up to 51% and that's determined upon acceptance of the kit. I'm sure the kit manufacturer would oblige on minimum requirements for self assembly

 

Those things that would be extremely difficult at home, as usually completed in most of the kits I've seen. And spraypainting/electrics/avionics don't seem to come into the equation

 

If in doubt, contact the RAAus first before buying and constructing from a kit, and what's the minimum requirement for you to construct for the particular kit. Then keep a very detailed logbook with photos and no problem. The last thing you want is to be refused registration over some technicality.

 

Over time, I tend to think this will be rigidly enforced a bit like the previous 101.28 , which you can still use by the way. Only takes one or two to stuff something up for everyone.

 

Incidentally, I'm building my own design under 95.10, where there is much greater freedom(if lower weight, 300kgsingle seat, wing loading restrictions) Incidentally, the 51% rule doesn't seem to apply here.

 

It's still a confusing issue for some and a comprehensive article by RAAus would be a very good idea.