Buy a plane that the owner never registered?

Ron Levy said:
You mean your distracting posts that had nothing to do with the original question and only raised spurious issues? :mad2:
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more like this

your post #14
It should be good as long as Bob has possession of the aircraft. But how long since it last flew? Was it cared for in the interim? Is there ay chance the Flying->Bob Bill of Sale is defective? Can you get a warranty from Bob on that point? The last two are good reasons to let an escrow company handle the transaction so you are sure that Bob doesn't get your money until the title clears Oklahoma City.
 
Put money in escrow for plane contingent on successful registration with FAA, clean title search, and anything else you're worried about. In the bill of sale, add a little comment that says Bob & the company that owns the plane agree to indemnify you with any trouble you may have with the title. As Cap'n'Ron said, there are possessory liens, but there are also non-poss. liens that may be filed with the state UCC office that a basic title search may not find - liens are state law - yes there is a "UCC" but each state does it slightly differently...
 
mrkbbd said:
...there are also non-poss. liens that may be filed with the state UCC office that a basic title search may not find - liens are state law - yes there is a "UCC" but each state does it slightly differently...
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A lien on an aircraft filed with a state but not with the FAA Registry cannot be perfected against the new owner once ownership is transferred via the FAA process. Lots of case law on point.
 
Ron Levy said:
A lien on an aircraft filed with a state but not with the FAA Registry cannot be perfected against the new owner once ownership is transferred via the FAA process. Lots of case law on point.
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Kool.. I didn't know that.....
 
Ron Levy said:
A lien on an aircraft filed with a state but not with the FAA Registry cannot be perfected against the new owner once ownership is transferred via the FAA process. Lots of case law on point.
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Again, state dependent, just because state X says so, doesn't mean state Y agrees...a case in Maryland does not hold in Virginia, you can argue it is on-point but it holds no weight...erring on the side of caution when there are unknowns is the best advice. Plan for the worst. Think about how much it costs to get the court to say "it's yours" -- get the indemnification clause
 
Ron Levy said:
A lien on an aircraft filed with a state but not with the FAA Registry cannot be perfected against the new owner once ownership is transferred via the FAA process. Lots of case law on point.
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Also, it is possible to file a UCC lien on the equipment w/o filing a FAA lien or any upgrades (think engine overhaul, etc.)...
 
mrkbbd said:
Again, state dependent, just because state X says so, doesn't mean state Y agrees...a case in Maryland does not hold in Virginia, you can argue it is on-point but it holds no weight...erring on the side of caution when there are unknowns is the best advice. Plan for the worst. Think about how much it costs to get the court to say "it's yours" -- get the indemnification clause
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Doesn't matter when it's Federal law and the Federal courts have stated their position. See "Federal preemption" in your favorite law book. BTW, the cases on this point go back 50 years or more. I'm on the road so I don't have my law books handy, but I can post the specific cases when I get home in 10 days.
 
Ron Levy said:
Doesn't matter when it's Federal law and the Federal courts have stated their position. See "Federal preemption" in your favorite law book. BTW, the cases on this point go back 50 years or more. I'm on the road so I don't have my law books handy, but I can post the specific cases when I get home in 10 days.
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The basis of Federal Preemption is an analysis of on-point vs not on-point, procedural vs. substantive...a perfect example of this is that airplane accidents are generally state law matters despite being dealt with by the FAA / NTSB

This is WAY too complicated of an analysis for something that literally costs $0 to add to the transaction, an indemnification clause...if there are any issues you at least can rely on that...

Ron, please PM the case...I'm very curious

The final state to adopt the UCC was Louisiana (where I live) and it was in like 1990...meaning a 1950s case may not apply in all situations. The answer again is "it depends," do you really want to spend the money to fight it or do it right from the beginning?
 
mrkbbd said:
Also, it is possible to file a UCC lien on the equipment w/o filing a FAA lien or any upgrades (think engine overhaul, etc.)...
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Very very seldom does that ever happen, (Engine purchase or parts/repairs) you pay or the they don't ship.

When you borrow the money to purchase the aircraft the banks will have a mortgage (for lack of a better term) and that will be recorded at OKC.

Read the instruction on the cover page of a 8050-2 form that tells you just how to do that.
 
Tom-D said:
Very very seldom does that ever happen, (Engine purchase or parts/repairs) you pay or the they don't ship.

When you borrow the money to purchase the aircraft the banks will have a mortgage (for lack of a better term) and that will be recorded at OKC.

Read the instruction on the cover page of a 8050-2 form that tells you just how to do that.
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I know for a fact that my plane has a UCC lien on the avionics as security for the loan on the aircraft as well as a lien filed with the FAA on the hull
 
mrkbbd said:
I know for a fact that my plane has a UCC lien on the avionics as security for the loan on the aircraft as well as a lien filed with the FAA on the hull
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The banks do know how to protect their interests.
 
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