Most, but not all, states have statutes requiring claims of mechanic liens be recorded with the FAA Aircraft Registry at a minimum, in order to be effective. States will frequently couple the FAA filing requirement together with a requirement to file with the clerk of the local court having jurisdiction where the aircraft is located. Some states require that a written agreement for the work performed be filed with the FAA and that the claimant have possession of the aircraft in order to affect enforcement of the lien. Many states have provisions allowing the holder of a lien to sell a possessed aircraft to recover payments due. There are also varying time constraints and other administrative requirements that must be adhered to. Again, the laws of each state direct the filing and enforcement processes of liens.
As for recording a lien with the FAA, a claim must include, at a minimum, the following:
Once the FAA records a lien, they will send the claimant/secured party a Conveyance Recordation Notice which can be used in the future to release the claim of lien. In the meantime, the lien recordation will encumber the aircraft with an unclear “title” making it difficult to sell to an informed buyer. It’s important to note that the FAA will not take sides as to the validity of a lien claim – that is, just because the FAA accepts and records the lien is not proof that it is a valid and enforceable claim. A dispute over the validity of a lien and enforcement to recover the owed money will be subject to state law. And, if a claimant is found to have improperly encumbered an aircraft, it could produce a substantial penalty—think counter-claim for damages from a lost sale, for instance.
Potential mechanic’s lien claimants should become familiar with the lien-related laws and recording provisions of their state. And, as circumstances call for it, they should consult a competent aviation attorney for assistance.
Kathy Yodice is the Managing Partner of Yodice Associates, a private practice law firm with a special emphasis on aviation law. She has more than 30 years experience representing airman in FAA enforcement actions, regulatory compliance matters, accident investigations, and aviation-related business issues.
Legal services are provided by Yodice Associates to qualified aviation maintenance professionals. PAMA members receive disounted rates. Learn more at MX PRO.