Privéjet Closing Process & Escrow

Closing process is finale transactie fase waarbij ownership officially transfers van seller naar buyer. Timeline typically 60-90 dagen from accepted offer. Key stages: (1) Escrow opening - neutral third-party escrow agent receives purchase agreement, deposit funds, coordinates document flow. Escrow fee €15-30K split between parties. (2) Title search - attorney verifies aircraft has clear title without liens, encumbrances, disputes. FAA/EASA database searches, UCC filings review, previous ownership verification. Timeline 2-3 weken, cost €5-10K. (3) Pre-purchase inspection - comprehensive technical evaluation (engines, airframe, avionics, systems) by qualified shop. Buyer travels to aircraft location, 3-5 day inspection, cost €25-40K. Findings trigger price renegotiation of walk-away. (4) Financing finalization - if using loan financing, lender completes underwriting, appraisal, loan documents preparation. Requires 3-4 weken, extensive documentation. (5) Insurance placement - secure hull + liability coverage (€50-100M) effective at closing. Broker coordinates quotes from multiple carriers, policy issuance 2-3 weken pre-closing. (6) Registration preparation - attorney prepares new registration documents, coordinates with aviation authority (FAA N-number of Dutch PH- registration), reserves tail number. (7) Closing documents execution - typically 15-20 documents requiring signatures: Bill of Sale, Purchase Agreement, Escrow Instructions, Affidavits, Warranties, Power of Attorney, Lien Releases. Attorney coordinates simultaneous signature (often remote with notarization). (8) Funds transfer - buyer wires purchase price to escrow, escrow verifies receipt, coordinates with seller's lender (if outstanding loan) for payoff, calculates net proceeds. Wire transfers typically €45-65M requiring bank coordination, multi-level approvals. (9) Title transfer - upon escrow confirming funds received and documents executed, Bill of Sale filed with aviation authority, new registration issued, aircraft officially transfers ownership. (10) Delivery - physical handover at agreed location, acceptance inspection, keys/documents transfer, crew transition. Proper closing requires coordination between: buyer, seller, escrow agent, attorneys (both sides), lenders (if applicable), insurance broker, registration authority, maintenance shop. Professional transaction coordinator (often buyer's attorney of aircraft broker) manages timeline, document flow, deadline compliance. Failed closings typically result from: financing falls through, title issues discovered, inspection reveals major defects, seller unable deliver clear title, insurance denied. Contingency protections essential. For business aircraft buyers, additional corporate documentation may be required.

Escrow provides neutral third-party protection for both buyer en seller during transaction. Specialized aviation escrow companies (AircraftEscrow.com, LegalEscrow, Aerospace Reports) understand aircraft transaction complexities. Escrow process: (1) Opening - escrow agent receives executed purchase agreement outlining terms, conditions, timelines, deposit amounts, contingencies. Buyer wires initial deposit (typically 5-10% = €2,5-5M on €50M aircraft) to escrow account. Escrow confirms receipt, holds funds in interest-bearing account. (2) Document custody - escrow receives critical documents: title documents, maintenance records, airworthiness certificates, lien releases, warranties, insurance certificates. Verifies documents complete per purchase agreement. (3) Condition monitoring - escrow tracks contingency satisfaction: inspection completion and approval, financing approval, title clearance, insurance placement. Releases funds only when all conditions met. (4) Lien payoff coordination - if seller has outstanding loan, escrow coordinates with lender: obtains payoff amount, verifies lien release documentation prepared, disburses seller proceeds net of loan payoff. Critical: liens must be released before title can transfer cleanly. (5) Closing coordination - escrow schedules closing date when all parties ready, coordinates simultaneous signature of closing documents (often via remote notarization given geographic dispersion), receives final purchase funds from buyer. (6) Disbursement - upon confirming: all documents executed, funds received, contingencies satisfied, escrow disburses: seller receives net proceeds (purchase price minus loan payoff, seller closing costs), seller's broker commission, escrow fee, recording fees, attorney fees. (7) Post-closing - escrow retains copies of all documents, provides complete closing binder to buyer/seller, handles any post-closing adjustments (prorated hangar fees, fuel, prepaid maintenance). Escrow fees: typically €15-30K depending on transaction complexity, split equally between buyer/seller of negotiated differently. Escrow protection benefits: (1) Deposit protection - buyer's deposit secure in neutral hands, not accessible to seller if deal fails qualifying contingencies. (2) Document verification - professional review ensures completeness before funds released. (3) Lien clearance - escrow verifies all liens released before disbursing seller proceeds. (4) Dispute resolution - neutral party mediates disagreements about condition satisfaction. (5) Timeline enforcement - escrow tracks deadlines, notifies parties of approaching dates, prevents deal drift. Understanding total acquisition costs including escrow fees is critical for proper budgeting. Red flags requiring escrow caution: seller resistance using established escrow company (prefers 'their' attorney holding funds - potential misappropriation risk), pressure releasing funds before contingencies satisfied, incomplete lien documentation, rushed closing without proper verification. Never allow seller of seller's broker direct access to deposit funds - always use qualified, bonded, insured escrow agent. Verify escrow company credentials, client references, errors & omissions insurance, bonding before engagement. Consider consulting with business aviation advisors for complex corporate transactions or comparing leasing alternatives if closing complications arise.

Aircraft closing requires extensive documentation - typically 15-25 documents depending on transaction complexity, jurisdiction, financing. Core documents include: Aircraft Bill of Sale with purchase price details, Purchase Agreement, Escrow Instructions, Title Opinion, Lien Releases, and Affidavit of Ownership. Seller documentation regarding maintenance status, airworthiness, and equipment operability creates legal recourse if misrepresented. Additional documents if financed: Promissory Note detailing loan repayment terms, Security Agreement granting lender collateral rights, comprehensive Loan Agreement (typically 40-60 pages), and Personal Guarantee if corporate borrower. Corporate documents include board resolutions authorizing aircraft purchase, Articles of Incorporation, and Operating Agreement showing member authority. Delivery documents include Weight & Balance, complete Maintenance Logs, Equipment List, and Flight Manual. Attorney assembles complete closing binder for buyer's permanent records - critical for future maintenance, resale, regulatory compliance, insurance claims. Budget €15-25K total legal fees for document preparation, review, execution coordination.