The civil aviation industry relies on the FAA for many services, including information, certification, and training. While the FAA also provides many resources, it is still sometimes difficult to understand how they handle documentation – that is important when registering in trust. Further, and more specifically, what is the FAA’s position on aircraft titles?
The answer, quite simply, is they do not have one. Aircraft owners, or owners in trust, should know that the FAA’s sole purpose regarding aircraft titles has been to file and record documents.
While the FAA has primarily been a document repository thus far – not authorized to issue certificates of title, make any determinations related to aircraft titles, or issue opinions on the status of a title – the difference between filed and recorded FAA documents can affect an aircraft’s title and delay registration.
The standard list of recordable documents that are related to an aircraft’s title includes (but is not limited to): the bill of sale, application for registration, security interests, claims of liens, releases, and disclaimers. There is also a long list of documents that the FAA will not record – which is equally important knowledge to have when registering in trust.
Here is additional important information, and examples, regarding the FAA’s position on aircraft titles – some of the ins and outs of what is reviewed, recorded, searched, and decided on.
Aircraft Title Reports
Title reports are a review of the records at the FAA, but they are not issued by the FAA. Instead, private companies, such as title companies and law firms, search FAA records to create and issue reports based on their own interpretations of the information found. Different companies may reach different conclusions based on their research, which can result in conflicting title reports for the same aircraft.
For example, a client may buy a plane based on a title search with a clear title. When he or she then goes to sell the plane, it is not uncommon for a different title company to report a cloud on the title – and according to our sister company, Wright Brothers Aircraft Title, clouded titles can cause a host of problems.
In a case such as this, the FAA does not get involved at all. They will not offer decisions on who is right and who is wrong. Buyers and sellers who find themselves in this situation must go back to the reporting companies and work to resolve the discrepancy.
Searching Aircraft Title Information
While the FAA is undergoing a massive modernization project to digitize records, they currently give some basic title information on their N-Number Inquiry website page, like the make, model, and serial number of the aircraft. They also provide the identity of the registered owner.
However, the only way to know if there are any outstanding liens against an aircraft is to search the entire aircraft record, and the FAA is not in the habit of doing that. Therefore, you will find nothing online telling you if there are any liens against your aircraft. If asked, the FAA will advise you to call a title company or law firm, who will perform a title search of all available documents.
There is what might be considered an exception, pertaining to the sale or purchase of an aircraft that will be exported out of the US. This is the only time the FAA will search an aircraft record and make a statement about liens against a title.
By law, a plane cannot be exported to a foreign country if a US lender has an interest in that plane without the permission of the lender. So, when the FAA receives a request to deregister a plane, they will search the records to determine internally if there are any outstanding consensual liens against the title.
They still will not issue a certificate of title to the public. If the title is clear, they will issue a certificate of deregistration. If not, they will inform the parties involved that they cannot deregister the aircraft. The burden of clearing the title or resolving the issue, once again, falls back to the parties involved.
FAA’s Position on Aircraft Titles – Accessing FAA Records
Obviously, the process of searching aircraft records to produce accurate title reports is not as simple and straightforward as one might think. While the FAA records are public, and anyone can request and receive (currently by mail) a full copy of the FAA file on any aircraft, not everyone wants to do that.
The FAA modernization project, along with recent GAO recommendations, are pushing public electronic access forward. In the meantime, documents can only be viewed electronically in the Public Documents Room (PDR) at the FAA in Oklahoma City. This is not easy for those who are not located nearby and has recently been made more difficult with pandemic safety measures.
Aircraft Guaranty has offices located at the FAA’s PDR for the efficient review of FAA records and the timely completion of title reports to clients on a regular basis. We also help with deregistration requests, and when necessary, title clearing services.