December 2010 - Page 2 Aviation Articles

Change of guard in Washington, D.C. should be good for aviation in the U.S.

The elections should be good not only for business aviation, but also for the overall aviation industry in the United States. Less government meddling and more free-market forces will ultimately lead to a more efficient system.

 

A significant change has taken place with the defeat of Rep. James Oberstar, D-Minnesota, who was the powerful chair of the House Transportation Committee.

 

Even had he not been defeated, with the change in party control, Rep. John Mica, R-Florida would still take the leadership position on this committee. Josh Mitchell, writing for the Wall Street Journal in a Nov. 5 article, talks about this in more detail.

 

If you have tracked Congress’s work (or lack thereof) in passing the FAA Funding Reauthorization Bill, you know that this bill has been held up from final passage due to non-related issues being attached to it regarding unionization of FedEx drivers. Mr. Oberstar was a friend of the unions, but his tenure in Congress is over.

 

Could it be that the gamesmanship might finally be over? Maybe we will get funding of NextGen and the FAA can take a long-term view of the development of the infrastructure this country needs to have an efficient air transportation system.  


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Another post-election article in Bloomberg discusses the major airlines gaining allies with the new Republican House on outsourcing and anti-trust issues.

 

Quoting from that article:
“The current Congress has been anti-airline,” said William Swelbar, a research engineer specializing in air transport at the Massachusetts Institute of Technology in Cambridge. “There will be a new set of ears to listen to the industry.”  

 

The consensus seems to be that the new guard will be less intrusive into the affairs of the airlines and general aviation, letting the market work things out.

 

This is good news for the air transportation system and, ultimately, good news for the business and general aviation segments. Less interference will allow us to demonstrate our value without legislation unbalancing the system towards unions or big business interests.

How Long Does An Aircraft Mechanic's Lien Last?

I was recently asked the question "what happens to an aircraft mechanic's lien that isn't foreclosed upon within a certain period of time?" This person had been researching aircraft records at the FAA Registry and found several aircraft with liens that were recorded against the aircraft over 15 years ago. Not surprisingly, this made him wonder how long an aircraft mechanic's lien lasts.

Since aircraft mechanic's liens (also known as "artisan liens") are creatures of state statutes, the applicable state statute will govern the validity of and rights associated with an aircraft mechanic's lien. All but 7 states have aircraft mechanic's lien statutes. Although federal law requires that an aircraft mechanic lien be recorded with the Registry in order to be effective against a third party, state laws dictate the requirements for "perfecting" a mechanic's lien against an aircraft, and, once perfected, for enforcing the lien against the aircraft.

As long as the lien claim or lien statement contains the required information (e.g. name, address, description of work performed, last date of work and amount) and was filed within the time period allowed by the applicable state statute, the FAA Registry will record the lien and the recorded lien will be an encumbrance against the aircraft. At that point, the lien claim is "perfected." Unfortunately, neither the FAA Registry nor any aircraft title company will take a position regarding the validity/enforceability of an aircraft mechanic's lien once that lien is perfected.

Once perfected, the lien claimant will have to file a lawsuit to foreclose upon the lien within the time allowed by the applicable state statute. If that does not happen, the lien claimant will no longer be able to enforce the lien against the aircraft. The lien claimant may still have a claim against the aircraft owner, but the lien claimant would not be able to enforce that claim against the aircraft unless the lien claimant obtained a judgment against the aircraft owner for the amount owed and then recorded that judgment with the FAA Registry.

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However, simply because a lien claim is no longer enforceable against the aircraft under the applicable state law, that does not mean that the lien recorded at the FAA Registry is removed. The aircraft will only be released from the recorded lien at the FAA Registry in one of two ways: (1) if the lien claimant signs a release of the lien and the release is recorded with the FAA Registry; or (2) if a court order is obtained declaring the lien as either invalid or unenforceable and that order is then recorded with the FAA Registry. Thus, once recorded, a lien claim, whether enforceable under state law or not, remains an encumbrance against the aircraft until the lien is released, either voluntarily or by judicial order.

So, the short, and not particularly precise, answer is: an aircraft mechanic's lien could be a problem for an aircraft for a very long time.


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