To perfect a lien on a civilian aircraft, your bank will need to record its security agreement with the Federal Aviation Administration (FAA). The rules for recording and enforcing a security interest in civil aircraft are governed by the Federal Aviation Administration Act, which governs the perfection of security interests in  this type of collateral.

Your bank should complete the FAA’s Aircraft Security Agreement form (linked below), which must be signed by your customer, referred to as the “debtor.” For the lien to be effective, the aircraft must be registered with the FAA. If the debtor is not the registered owner of the aircraft, the security agreement must be accompanied by the debtor’s Application for Aircraft Registration and evidence of ownership, subject to certain exceptions. An original or a duplicate original of the security agreement must be sent to the FAA’s Aircraft Registry at the address listed on the form with a filing fee.

The security agreement is considered recorded at the date and time it is received by the FAA Aircraft Registry. Once recorded, the security agreement is valid against all persons and provides lien priority against the claims of other secured parties. We note that unlike a UCC filing that must be renewed every five years, a lien filed with the FAA requires no further recordation.

For resources related to our guidance, please see:

• FAA website: Aircraft Certification Registration Forms, Aircraft Security Agreement

• Federal Aviation Administration Act, 49 USC 44108(b) (“When a conveyance, lease, or instrument is recorded under section 44107 of this title, the conveyance, lease, or instrument is valid from the date of filing against all persons, without other recordation . . .”)

• Federal Aviation Regulations, 14 CFR 49.19 (“A conveyance is filed for recordation upon the date and at the time it is received by the FAA Aircraft Registry.”)

• Federal Aviation Regulations, 14 CFR 49.33 (“A conveyance is eligible for recording under this subpart only if, in addition to the requirements of §§ 49.11, 49.13, and 49.17, the following requirements are met: (a) It is in a form prescribed by, or acceptable to, the Administrator for that kind of conveyance; (b) It describes the aircraft by make and model, manufacturer's serial number, and United States registration number, or other detail that makes identification possible; (c) It is an original document, or a duplicate original document, or if neither the original nor a duplicate original of a document is available, a true copy of an original document, certified under § 49.21; (d) It affects aircraft registered under 49 U.S.C. 44101–44104; and (e) It is accompanied by the recording fee required by § 49.15, but there is no fee for recording a conveyance named in § 49.31(b).”)

• Federal Aviation Regulations, 14 CFR 49.17(d)(1) (“A security agreement must be signed by the debtor. If the debtor is not the registered owner of the aircraft, the security agreement must be accompanied by the debtor’s Application for Aircraft Registration and evidence of ownership . . .  unless the debtor [listing certain exceptions].”)

• Travel Express Aviation Maintenance, Inc. v. Bridgeview Bank Group, 942 N.E.2d 694, 698–99 (2d Dist. 2011) (Finding that a defendant “was not required to file a continuation statement to maintain the perfection of its security interest in [an] aircraft” since “the Commercial Code indisputably defers to federal law on the subject of the ‘duration and renewal of perfection of a security interest’ in an aircraft, and section 44108 still provides that an ‘instrument is valid from the date of filing against all persons,’ without listing any applicable exceptions.”)