How to Handle Legal Disputes over Aircraft Hangar Leases?

Any property lease can result in a dispute with the landlord—complaints, rent hikes, poor conditions—but leasing a hangar can bring the FAA into the situation. The federal government provides funding for hundreds of eligible US airports under the Airport Improvement Plan (AIP). Airports participating in the AIP are subject to FAA conditions regulating their use, including the use of hangars.

These rules can affect your scope of usage as a lessee, and some lessors may try to use them against you to get out of your lease. For tenants who have built their own hangars and invested in their property, this is an especially daunting prospect. It’s wise to know what both parties can and cannot do so that you can defend your rights.

Hangars and Compliance at Federally Obligated Airports

According to the FAA, “when airport owners or sponsors, planning agencies, or other organizations accept funds from FAA-administered airport financial assistance programs, they must agree to certain obligations (or assurances) … to maintain and operate their facilities safely and efficiently and in accordance with specified conditions.”

Many of these assurances are relevant to hangar leasing and use, including:

“safe and serviceable” maintenance of facilities (Grant Assurance 19)
economic nondiscrimination (Grant Assurance 22)
never granting exclusive rights to provide airport services (Grant Assurance 23)
creating and abiding by an Airport Layout Plan (ALP) (Grant Assurance 29)
long-term leases for those constructing hangars (Grant Assurance 38)

Non-Aeronautical Usage

FAA policy also forbids the non-aeronautical use of hangars in an AIP airport. A hangar can be used for:

Storage of active aircraft and aeronautical equipment, including equipment for related activities such as skydiving
Repair and maintenance of aircraft
Construction of amateur-built aircraft
A parked vehicle that usually stays there while the aircraft is in flight (subject to airport regulations)

See the FAA’s Frequently Asked Questions. Unacceptable uses include:

Hazmat or fuel storage
A residence in the hangar
Long-term storage of inoperable aircraft or parts
Offices or operations for non-aeronautical businesses
Anything displacing aeronautical equipment or use in the hangar
Any activities that impede the movement of aircraft or aeronautical uses
Storage unrelated to aviation usage—items or inventory for household, business, or municipal agency use

If hangars are not in demand for aeronautical usage, the airport can request FAA permission to rent them for non-aeronautical use on a month-to-month basis. Aviation uses, however, must take priority.

Terminations and Reversions

A failure to cooperate with any of these requirements can be grounds for termination of the lease—reversion of the property to the airport authority or even to the government. Tenants who built their own hangars under an airport lease have been threatened with reversion and loss of their hangar under the color of FAA regulations. See “A Candid Reflection on FAA Aircraft Hangar Leases and Hangar Reversion Policy,” AOPA Government Affairs Staff, March 21, 2024.

However, despite past assertions, no FAA rule requires the reversion of hangars at the end of a lease. See 2006 Docket No. 16-05-19, Clarke v. City of Alamogordo. Nonetheless, the contract itself is subject to state law. And, of course, many issues with hangars and leases have nothing to do with the FAA.

Hangar Problems and Disagreements

Meaning of Lease Terms and Conditions

It’s not always clear what a lease means in practice, especially if the language is boilerplate compiled from many other contracts. Who is responsible for maintenance, and where? How much insurance must you carry? Are you allowed to sublease your hangar, and how? An aviation attorney can help you understand what you need without relying on the lessor’s claims.

Rent Terms and Negotiations

At this time, hangar space is generally in high demand, which can give a lessor the upper hand in setting rent. Consulting an aviation attorney can let you know whether the price is reasonable in your situation, especially if there is a clause fixing an annual increase or requiring a percentage of profits.

Hangar Rash

This is an unofficial term for damage that aircraft and equipment can sustain in a hangar, generally from transport, building conditions, or minor accidents. Hangar rash can include:

Dents to aircraft fuselage or equipment due to collisions with hangar door frames
“Fender-benders” with ground vehicles or equipment in motion nearby
Weathering damage resulting from poor building maintenance

Although these can be superficial or cosmetic issues, even a small accident can potentially threaten the airworthiness of the craft. That can result in delays, expense, or worse.

When hangar rash is a significant problem, it may be the result of a landlord’s failure to maintain the property safely. Alternatively, if you share a hangar space with co-tenants, their careless behavior may be the source of the issues.

Guidance for Your Contracts and Disputes

Our Florida aviation attorneys can represent you in hangar contract negotiations or disputes—and in court or at administrative hearings when necessary. Whether you manage an FBO or simply fly your small aircraft for leisure, we will be glad to hear from you. Contact us today at 954-400-4643 to set up your initial consultation in our Fort Lauderdale offices.