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Aircraft
Mechanic's Liens In Minnesota
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by:
Greg Reigel
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Aircraft
Mechanic Liens In Minnesota
If you provide storage, repair, maintenance or other services to
aircraft, you have the ability to assert a lien on that aircraft and
retain possession until you have been paid. This is commonly referred
to as a mechanic’s lien.
What isn’t as commonly known is that, in Minnesota, you don’t
necessarily lose your lien rights if you no longer have possession of
the aircraft. The situation arises when an owner pays you with a check
and leaves with the aircraft. Later, the bank dishonors the check. Now
what?
Under Minnesota Statute § 514.221, you can re-assert your mechanic’s
lien against an aircraft by filing a verified statement and description
of the aircraft and the work done or material furnished. The Statement
must be filed with the “appropriate office under the Uniform Commercial
Code.” This would be the FAA’s Aircraft Registry in Oklahoma City, OK.
The verified statement must include N-number, make and model of the
aircraft, amount owed for the services and date of last work. The
statement must be signed in ink, with title if on behalf of a
corporation or limited liability company and must be accompanied by the
$5.00 filing fee.
Also, if the owner of the aircraft is located in Minnesota, you may
want to file the statement with the Secretary of State. Although it is
not necessary to perfect your lien, it will provide notice to anyone
who doesn’t know to check with the Aircraft Registry.
This is called “perfecting” your mechanic’s lien and must be done
within 90 days after you provide the work, materials or service. Once
perfected, you now have a lien on the aircraft.
Perfection secures the amount you are owed with the aircraft. You then
have several options. First, in order to sell the aircraft, the owner
will need to pay you and obtain a release before the owner can give a
buyer clear title to the aircraft.
Second, you also have the ability to repossess and foreclose on the
aircraft. This means you can force a sale of the aircraft and then
receive payment out of the proceeds of the sale. Any excess money is
given to the owner.
Under the first option, you run the risk of having to wait until the
owner attempts to sell the aircraft. The second option gives you more
control, but is also more costly than simply waiting. However, under
either option you are definitely in a better position to get paid than
you would be without the lien.
About the Author
By Gregory J.
Reigel
Greg is an aviation attorney, author and holds a
commercial pilot certificate with instrument rating. His practice
concentrates on aviation litigation, including insurance matters and
creditor’s rights, FAA certificate actions and aviation related
transactional matters. He can be reached via e-mail at
greigel@aerolegalservices.com or check out his website at www.aerolegalservices.com.
© 2004 Reigel
& Associates, Ltd./Aero Legal Services. All
rights reserved.
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