Clouded aircraft title is not a common situation. Under a very few circumstances, it happens. It is mentioned in earlier blogs as well that any problem with the aircraft title and escrow can create a huge problem for the airplane owners to operate their plane. The problems should not be overlooked ever. There can be a financial problem as well, as the lenders hesitate if information and documents pertaining to the aircraft title search are not transparent.
Hence, you have to understand the potential problems with the aircraft title and escrow in order to avoid them.
There are numerous documents recorded by the FAA in order to maintain the title of an aircraft. It includes the liens, agreements, instruments, releases and many others. The FAA has a long list of rules that must be maintained in order to get the documents recorded. And for the making the aircraft title clear and transparent, the documents need to the recorded by the FAA.
There are many issues found with the aircraft title and that makes the entire process obstructed. One of the most common issues with the aircraft title and escrow is with the unreleased liens and security agreements. If the liens are 20 or more years old, it becomes difficult to find the parties involved in the transaction. Lien is consensual and the security agreement is non-consensual.
Security and mortgage agreements are also consensual where the aircraft owner agrees to the lien. The buyer of the airplane borrows money from the bank. Because the lending institution or bank changed the ownership of the business, the liens remain outstanding. It remains so until all the records of the original liens are misplaced or not found forever.
But the liens are non-consensual. It is placed on the aircraft title and escrow without the consent of the owner. Generally, these are from the mechanics or taxing authorities who claim that they owe payment for the services or unpaid taxes respectively. These liens can be filed against an aircraft at any point in time, regardless of the motive. Here, at least the compensation is imperative because who has lodged a complaint against an aircraft wouldn’t sign a release very easily.
Other problems with the title take place with document errors. The problem with the document can include a missing signature, inconsistent information about the owner and many others on a bill of sale. In this case, the title wouldn’t be approved by the FAA and it is completely illegal to operate an airplane without the FAA approved title.
The list of the problems is long, but you can avoid it easily. Hire a professional to perform the job entirely to make you enable to operate the flight. Come to Aero Title and get a fine solution for any clouded aircraft title and escrow services.