1. December 2010 12:04
Share on Facebook
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.
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.
Find FAA resources in the GlobalAir.com Aviation Business Directory here.