Understanding hangar lease terms before signing protects your interests and prevents unwelcome surprises. Lease agreements vary significantly between airports and landlords, making careful review essential before committing to what may be a long-term obligation.
Basic Lease Components
Rent Structure
Understand exactly what you’re paying:
- Base rent: The primary monthly or annual payment
- CAM charges: Common Area Maintenance fees for shared facilities
- Utility pass-through: Water, sewer, sometimes electricity
- Tax escalation: Landlord passing through property tax increases
Rent Increases
Know how and when rent can increase:
- Fixed annual increases (e.g., 3% per year)
- CPI adjustments tied to inflation
- Market rate adjustments at renewal
- Caps on maximum increases
Lease Term Considerations
Length Options
- Month-to-month: Maximum flexibility, minimum security, often premium priced
- Annual: Standard commitment, predictable costs for one year
- Multi-year: Rate protection, reduced flexibility, may require personal guarantee
Renewal Rights
Protect your tenancy with clear renewal terms:
- Automatic renewal provisions
- Required notice periods for non-renewal
- Rent determination at renewal
- Right of first refusal if sold
Use Restrictions
Permitted Activities
Leases typically specify allowed uses:
- Aircraft storage (primary use)
- Maintenance activities (may be restricted)
- Commercial operations (often prohibited or requiring approval)
- Vehicle storage (frequently limited)
- Living quarters (almost always prohibited)
Subletting Rights
Can you share space or sublet if your needs change?
- Subletting prohibition or approval requirements
- Space sharing with other aircraft owners
- Assignment rights if you sell your aircraft
Maintenance Responsibilities
Tenant Obligations
You’re typically responsible for:
- Interior cleanliness and minor repairs
- Light bulb and filter replacement
- Damage caused by your activities
- Pest control within your space
Landlord Obligations
Landlords typically handle:
- Structural repairs and roof maintenance
- Major systems (HVAC, electrical main service)
- Common area maintenance
- Exterior and ramp maintenance
Insurance Requirements
Typical Requirements
- Liability insurance (often $1M minimum)
- Aircraft insurance with landlord named as additional insured
- Contents/personal property coverage
- Certificates of insurance provided annually
Termination Provisions
Your Exit Options
- Required notice period for termination
- Early termination penalties
- Conditions allowing lease breaking
- Deposit return procedures
Landlord’s Rights
- Non-payment cure periods before eviction
- Other default triggers and remedies
- Airport closure or redevelopment clauses
Red Flags to Watch
- Unlimited rent increase provisions
- Personal guarantees beyond the lease term
- Liability waivers for landlord negligence
- Unreasonable restrictions on hangar use
- Vague maintenance responsibility language
Negotiation Points
Don’t assume leases are non-negotiable:
- Rent reduction for longer terms
- Caps on annual increases
- Tenant improvement allowances
- First right of refusal for adjacent space
- Extended cure periods for defaults
Taking time to understand lease terms prevents disputes and ensures your hangar arrangement meets your needs throughout the tenancy.
