FAA Title Search

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frgo0629

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frgo0629
I completed a title search on an aircraft and the financing company of course had a lien. There was also a lien from an airport for ramp fees back in 08. However this aircraft has changed hands twice since the ramp fee lien was on the aircraft. Does the FAA allow aircraft to change ownership with out notification to anyone with liens?
 
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The FAA doesn't give a hoot if the transfer leaves the lien. If you buy a plane that already has a lien on it it is called "subject to." Seen it happen far too often. Most finance companies are pretty hinky about being junior to such liens.
 
flyingron said:
The FAA doesn't give a hoot if the transfer leaves the lien. If you buy a plane that already has a lien on it it is called "subject to." Seen it happen far too often. Most finance companies are pretty hinky about being junior to such liens.
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Yep. FAA doesn't care about what deal the parties to the transaction made. Any more than your local recorder of real estate deeds cares. They just record to provide notice.

Sometimes a buyer will intentionally take subject to the lien as part of a deal (usually requires lender agreement) rather than get a new loan.

Someone should check with the lender. It might be easy - the lender was paid off but didn't record the release. It happens, especially a buyer along the way figures, "what the heck, who needs a lawyer or title company?" Sometimes it can be a much bigger PITA, as happened with a client of mine some years back.
 
My neighbor when he was buying his Waco found there was a lien from a couple of owners ago. It took the seller some scrambling to get it cleared up. Bob rightfully would not complete the purchase of the aircraft subject to any liens (even though he was paying cash).
 
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My finance co refused to proceede forward till the seller sorted out the liens. One was from 1980 and the shop no longer exisis.
 
I just purchased a plane and during the title search a lien was found from the owner before the current seller. The finance company stopped right there and would not proceeded until a lien release was given. So the seller had to jump through some hoops and got it all taken care of (in 3 days no less..shock!). And then we were able to go forward with the deal.
 
In the process of purchasing a glider, we found that the original purchase loan had not been properly cleared. The aircraft had changed hands about 4 times, had other loans that had cleared, but had this one item hanging over it.

We were able to find the original bank at the address. The bank had been through several owners too. Explained the problem, provided copies of the original paperwork and explained that the FAA required original signatures and not copies on their forms and not the bank forms. The bank agreed that the lien had been paid, they did their research in 2 days. Completed the forms I requested and sent the originals to the FAA.

No problem.
 
Way back when I bought my first plane, a Cherokee 140, It didn't have a lien on it but the release of an old lien from the 1970's had been filed against the wrong FAA document number ("conveyance " number). It took a bit of time to find the bank who bought the bank who bought the bank who bought the bank, etc, about a dozen owners of the original lien later... but the final bank when located understood exactly what had transpired and knew what to do and immediately sent the FAA a document to correct the conveyance number to which the lien should have been released upon. It only took a few phone calls and a faxed request letter to the chief loan officer of the end-result bank to get the ball rolling. Overall, it took about 3 days to get everything straightened out.
 
James331 said:
No biggie, just have the seller fill out a 8050, be sure he puts the number from the FAA recorded lien.

http://www.aopa.org/-/media/Files/AOPA/Home/News/All News/2005/Answers for Pilots (10)/8050-41.pdf

My plane had 3 liens on it when I bought it, sent in the 3 8050s with the bill of sale and reg transfer, I followed up to make sure everything went through.

It's not that complicated.
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Um, that form is to be filled out by the finance company, not the seller (read the signature block). Of course, I guess the seller "could" forge the finance company's signature and the buyer "could" join in the venture by recording the forged releases.

All that potentially unlawful (and potentially criminal) activity sounds not all that simple to me.

Of course, if the lien was in fact paid off, it's more like the famous defense to murder - "but he was dead already"
 
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Bottom line is that if the lien was on file when the transfer occurred, the FAA is OK with that but the lien remains enforceable against the new owner, which is why banks won't let you buy an airplane with their money unless all prior liens are cleared. So, you might just want to see about getting that ramp fee lien cleared before you buy, either by having the seller take care of it or deducting the amount from the selling price and paying it yourself.
 
midlifeflyer said:
Um, that form is to be filled out by the finance company, not the seller (read the signature block). Of course, I guess the seller "could" forge the finance company's signature and the buyer "could" join in the venture by recording the forged releases.

All that potentially unlawful (and potentially criminal) activity sounds not all that simple to me.

Of course, if the lien was in fact paid off, it's more like the famous defense to murder - "but he was dead already"
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Not what I was saying.

Get the things filled out.

As per the instructions on the sheets.
 
simtech said:
I just purchased a plane and during the title search a lien was found from the owner before the current seller. The finance company stopped right there and would not proceeded until a lien release was given. So the seller had to jump through some hoops and got it all taken care of (in 3 days no less..shock!). And then we were able to go forward with the deal.
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Exactly... We were ready to close and everything came to a grinding halt.
 
James331 said:
Not what I was saying.

Get the things filled out.

As per the instructions on the sheets.
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Sorry, with other people already saying to get the lender to release the lien and a number of folks mentioning that even this can be a problem in some cases, I thought you were suggesting something very different ("just have the seller fill out...").

Yep, if the lender is being paid off as part of the sale it should be simple as pie. It's when the lien is a few transactions back and may or may not have been paid off before and the lender may have changed names a number of times in the interim that there can be a problem or two.
 
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