How To Find Out If A Lien Exists?

Sinistar

Sinistar

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My wife's friend is selling her plane. She is currently buying it on monthly payments + interest from an older gentlemen she bought it from. I believe he is in his mid 90's and she is having some difficulty getting some answers. Most importantly, it is not clear if he actually placed a Lien on the aircraft or not. She is not trying to sell it or screw him over, rather she just wants to know in advance if this will be one more thing that will complicate the sale. Fortunately, she is no where near upside down. I think her goal is to have the buyer make out 2 cashiers checks so she can directly pay him back with one and keep the remainder for the part she's already paid off.

How does a person find out if a Lien has been placed? This is for Minnesota. Is an aircraft Lien a federal thing or state thing? If there is a Lien what kind of forms are required to remove the Lien?
 
Sinistar said:
How does a person find out if a Lien has been placed? This is for Minnesota. Is an aircraft Lien a federal thing or state thing? If there is a Lien what kind of forms are required to remove the Lien?
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A good lien search will include the FAA Registry search referred to and a UCC search just in case there is something filed on some newer accessories.

But let me ask you this. If you pay the $10 to get the FAA record, which goes back to the initial sale, will you understand what you are reading? Would you recognize an undischarged linen from 10 years ago (BTDT)? There are aircraft escrow/title companies which will do that and make sure the transfer paperwork is correct for a reasonable fee.

No comment on the weird double cashiers check concept. I done even understand it.
 
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Sinistar said:
I think her goal is to have the buyer make out 2 cashiers checks so she can directly pay him back with one and keep the remainder for the part she's already paid off.
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This seems a bit unprofessional. Your situation on the aircraft is not the buyers problem and they may decide to do escrow or a wire transfer, as long as you get the money that's all they or you should care about. Then it's your problem to divide it up, not the buyer's.
 
Another thing to keep in mind. It does take some time to have a lien released. When I sold the Mooney a few years ago, it took BOA (used them for some avionics upgrades) a few weeks to clear the lien once paid off and the FAA to register it. It takes some patience from the buyer or the parties can complete the deal if there is trust built between the two. We had that and I kept the new owner appraised of the status and sent him a copy of the cleared lien once it posted.

All bets are off if it's a really old and outdated lien, especially if the bank no longer exists. That can take a lot longer.

Cheers,
Brian
 
Mtns2Skies said:
This seems a bit unprofessional. Your situation on the aircraft is not the buyers problem and they may decide to do escrow or a wire transfer, as long as you get the money that's all they or you should care about. Then it's your problem to divide it up, not the buyer's.
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"nprofessional" I dunno. Unwise - perhaps, but its a business deal so whatever works for both parties. However, once a third party is involved, as in the example, it is best to get a neutral agent involved, escrow agents exist for these situations. I would be concerned that the OP implied that the prior owner is not entirely on the ball now that he is in his 90's. Many more questions to ask for example: how was the loan documented? Is there someone who can speak for the guy in his 90's (power of attorney)? Is there documentation of the original loan and if so what does it say? A professional escrow agent would be my recommendation as it was with midlife flyer.
 
You need this sorted with an escrow agent and title company. If the old fellow dies, his heirs will get involved and you don't want them saying they still have a lien on the airplane. Title insurance will avoid most of that issue.
 
midlifeflyer said:
A good lien search will include the FAA Registry search referred to and a UCC search just in case there is something filed on some newer accessories.

But let me ask you this. If you pay the $10 to get the FAA record, which goes back to the initial sale, will you understand what you are reading? Would you recognize an undischarged linen from 10 years ago (BTDT)? There are aircraft escrow/title companies which will do that and make sure the transfer paperwork is correct for a reasonable fee.

No comment on the weird double cashiers check concept. I done even understand it.
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And a UCC search would have to include any and all states where an owner has lived and/or a transaction has taken place. In the world of medium-sized tractors, many folks sell theirs without paying off the note, unbeknownst to the purchaser, until the item is repossessed.
There's something weird about this transaction.
 
Kenny Phillips said:
And a UCC search would have to include any and all states where an owner has lived and/or a transaction has taken place. In the world of medium-sized tractors, many folks sell theirs without paying off the note, unbeknownst to the purchaser, until the item is repossessed.
There's something weird about this transaction.
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Not necessarily weird.
  • B buys airplane from a and gives A paper for part of the purchase price.
  • B wants to sell to C and needs to pay of A out of the proceeds.
A little more complex that the typical no-lien airplane, but not really weird. Should be looked at by a professional though.

Whether a UCC search as extensive as you suggest is necessary or not depends.
 
Thanks for all the info and suggestions so far. Please help me out here, does @Tantalum do this kind of stuff for his day job?

The split cashiers check was just a quick idea floated. My friend wants to make sure she pays off her part and thought that might be a good way. She can always receive the full payment and then pay him too. Right now she is thinking he never even filed a Lien as she never received any notification. Also, this is all relatively recent as in I think she bought in the last 5 or 6 years so most likely there isn't any other banks or states involved....but that is for the search to figure out. I am going to pass this thread on to her so she can get a better idea of what is a safe course of action. I know as a buyer I would not want a lien involved. If there was a lien I would need to feel 100% confident that my payment was going to fully resolve the lien and not result in the seller still owing a bank something.
 
Sinistar said:
Thanks for all the info and suggestions so far. Please help me out here, does @Tantalum do this kind of stuff for his day job?

The split cashiers check was just a quick idea floated. My friend wants to make sure she pays off her part and thought that might be a good way. She can always receive the full payment and then pay him too. Right now she is thinking he never even filed a Lien as she never received any notification. Also, this is all relatively recent as in I think she bought in the last 5 or 6 years so most likely there isn't any other banks or states involved....but that is for the search to figure out. I am going to pass this thread on to her so she can get a better idea of what is a safe course of action. I know as a buyer I would not want a lien involved. If there was a lien I would need to feel 100% confident that my payment was going to fully resolve the lien and not result in the seller still owing a bank something.
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If there were a lien and I was a buyer, my money would not leave my hands (except to an escrow agent) unless I knew the lien had already been discharged.
 
midlifeflyer said:
Not necessarily weird.
  • B buys airplane from a and gives A paper for part of the purchase price.
  • B wants to sell to C and needs to pay of A out of the proceeds.
A little more complex that the typical no-lien airplane, but not really weird. Should be looked at by a professional though.

Whether a UCC search as extensive as you suggest is necessary or not depends.
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The weirdness was not of the way this transaction is occurring, but rather the fact that this plane seems to have changed hands without an A/W certificate, and the current owner believes that is OK. Heck, if he's a pilot, he knows that's wonky.
In terms of a UCC search: do it. Most states have it online (I looked up mine!) and if you miss a lien, you could end up losing whatever it is you have purchased.
 
Kenny Phillips said:
The weirdness was not of the way this transaction is occurring, but rather the fact that this plane seems to have changed hands without an A/W certificate, and the current owner believes that is OK. Heck, if he's a pilot, he knows that's wonky.
In terms of a UCC search: do it. Most states have it online (I looked up mine!) and if you miss a lien, you could end up losing whatever it is you have purchased.
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I am wondering if you are mixing this up with the other thread regarding the guy with no AW certificate for his 172?

For this case, my wife's friend does have the AWC. Actually its one of the first things I looked for when going to take all the pictures on Saturday. Paperwork wise, I thought her logs were well kept, lots of well presented AD compliance info, etc. The only think I found so far was that the Hobbs doesn't match the Tach but she said the Hobbs is INOP - just missing the sticker or being pulled.

For the case in this post I must admit I am hoping the elderly guy, probably about 90yrs when the did the deal, just didn't file the lien. My wife's friend can then sell it clean to the buyer and then just pay the guy all that he is due. Thank goodness (lien or not) that she will not be upside down to close out the entire sale.
 
Sinistar said:
I am wondering if you are mixing this up with the other thread regarding the guy with no AW certificate for his 172?

For this case, my wife's friend does have the AWC. Actually its one of the first things I looked for when going to take all the pictures on Saturday. Paperwork wise, I thought her logs were well kept, lots of well presented AD compliance info, etc. The only think I found so far was that the Hobbs doesn't match the Tach but she said the Hobbs is INOP - just missing the sticker or being pulled.

For the case in this post I must admit I am hoping the elderly guy, probably about 90yrs when the did the deal, just didn't file the lien. My wife's friend can then sell it clean to the buyer and then just pay the guy all that he is due. Thank goodness (lien or not) that she will not be upside down to close out the entire sale.
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Yep. I'm utterly confused! I had both threads opened at once. But still search for liens, it's cheap and easy.
 
I'm in aviation claims so I do this quite a bit. Contact these people - http://airtitle.com

They do a good job of uncovering the full lien history of the aircraft. Once in a while I do get some crazy unsettled lien with a defunct bank that went under 20 years ago. If this is the case, the seller needs to research which bank acquired which bank, all the way up to the present, and find someone there to write a letter on letterhead or email block stating that the lien has been satisfied. For instance, Acme Bank was bought by America bank in 1999. In 2007 American Bank was acquired by National Bank. So now you need to get National Bank.

Now Powell Title can do this for you, but at minimum the seller should pay for the service. I think we pay $500 for a simple title search, so I'm not sure how much it will be for the full deep dive since I just send the bill to accounting. Good Luck.
 
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