Regulation Text
Each owner must have a contract with the program manager that—
(a) Requires the program manager to ensure that the program conforms to all applicable requirements of this chapter.
(b) Provides the owner the right to inspect and to audit, or have a designee of the owner inspect and audit, the records of the program manager pertaining to the operational safety of the program and those records required to show compliance with the management specifications and all applicable regulations. These records include, but are not limited to, the management specifications, authorizations, approvals, manuals, log books, and maintenance records maintained by the program manager.
(c) Designates the program manager as the owner's agent to receive service of notices pertaining to the program that the FAA seeks to provide to owners and authorizes the FAA to send such notices to the program manager in its capacity as the agent of the owner for such service.
(d) Acknowledges the FAA's right to contact the owner directly if the Administrator determines that direct contact is necessary.
The short answer
(14 CFR § 91.1003) Each fractional owner must have a contract with the program manager that requires the manager to keep the program compliant, gives the owner audit and inspection rights over safety records, names the manager as the owner's agent for FAA notices, and acknowledges the FAA's right to contact the owner directly.
Research Notes
Common Questions
What audit rights must the owner contract include?
The contract must let the owner (or a designee) inspect and audit the program manager's operational-safety and compliance records.
“Provides the owner the right to inspect and to audit, or have a designee of the owner inspect and audit, the records of the program manager pertaining to the operational safety of the program and those records required to show compliance with the management specifications and all applicable regulations.” — 14 CFR § 91.1003(b)
How does the FAA serve notices to a fractional owner?
The contract designates the program manager as the owner's agent to receive FAA notices, while preserving the FAA's right to contact the owner directly.
“Designates the program manager as the owner's agent to receive service of notices pertaining to the program that the FAA seeks to provide to owners … Acknowledges the FAA's right to contact the owner directly if the Administrator determines that direct contact is necessary.” — 14 CFR § 91.1003(c)-(d)
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