If you provide storage, fuel, repairs or maintenance to an aircraft in Texas, you have the ability to assert a lien against that aircraft and retain possession until you have been paid. The lien is for either (1) the amount you are due under a contract you have with the aircraft owner or operator; or (2) if the contract doesn’t specify the amount, the reasonable and usual compensation for the services you provided to the aircraft. This is commonly referred to as an aircraft mechanic’s or artisan’s lien.
What isn’t as commonly known is that in Texas, as in many other states, you don’t necessarily lose your lien rights if you no longer have possession of the aircraft. This situation may arise when an owner pays you with a check and leaves with the aircraft. Later, the bank dishonors the check. Now what?
Under Texas Property Code § 70.302(b), you may still assert your mechanic’s lien against a U.S. registered aircraft by filing a verified statement with the FAA Aircraft Registry within one hundred eighty (180) days after completion of the contractual storage period or the performance of the last repair or maintenance. The statement must include the following:
The verified statement must be signed in ink and include the individual’s title if he or she is signing on behalf of a corporation or limited liability company, and it must be accompanied by the $5.00 filing fee. Also, if the owner of the aircraft is located in Texas, you may want to file the statement with the Texas Secretary of State. Although it is not necessary to perfect your lien, filing with the Secretary of State will provide notice to anyone who doesn’t know to check with the Aircraft Registry.
If the aircraft is NOT registered in the U.S., you may still assert your mechanic’s lien against the aircraft. But in this situation you will need to file an affidavit with the Texas Secretary of State within one hundred eighty (180) days after completion of the contractual storage period or the performance of the last repair or maintenance. The affidavit must include the following:
The fee for filing the affidavit with the Secretary of State varies depending upon the length of the affidavit and manner of filing: (a) $15 if the information is communicated in writing and consists of one or two pages; (b) $30 if the information is communicated in writing and consists of more than two pages; and (c) 5 if the information is communicated by another medium authorized by the Secretary of State.
In situations where you have lost possession of the aircraft, this filing of a verified statement or affidavit is called “perfecting” your mechanic’s lien. Once perfected, you now have a lien on the aircraft securing the amount you are owed even though the aircraft is no longer in your possession.
If you are fortunate enough to still have possession of the aircraft, keep in mind that you need to accomplish these same filings to perfect your lien. Additionally, Texas requires that a lien claimant in possession of the aircraft notify the aircraft owner shown on the aircraft’s registration certificate and also each holder of a lien on the aircraft as shown by the records at the FAA Aircraft Registry or the Texas Secretary of State, depending upon whether the aircraft is registered in the U.S. or a foreign jurisdiction.
The notice must be sent by certified or registered mail, return receipt requested, within sixty (60) days after the date of the completion of the contractual storage period or the performance of the last fueling, repair, or maintenance, and must state:
Once your lien is perfected, 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 convey clear title to the aircraft. In other words, unless the buyer is willing to buy the aircraft knowing you have a lien on the aircraft (a rare situation), then the aircraft owner will not be able to sell the aircraft without first dealing with your lien.
Second, you also have the ability to repossess the aircraft, if necessary, and then sell the aircraft at public sale any time after the 90th day after the date of the completion of the contractual storage period or the performance of the last fueling, repair, or maintenance. 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 person entitled to the excess proceeds, which may be the aircraft owner or some other lien holder.
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.
For more information on aircraft mechanic liens in Texas, or generally, please give me a call or send me an e-mail message. Additionally, you may find these other articles on the subject helpful:
The information contained in this web-site is intended for the education and benefit of those visiting the Aero Legal Services site. The information should not be relied upon as advice to help you with your specific issue. Each case is unique and must be analyzed by an attorney licensed to practice in your area with respect to the particular facts and applicable current law before any advice can be given. Sending an e-mail to Aero Legal Services or Gregory J. Reigel does not create an attorney-client relationship. Advice will not be given by e-mail until an attorney-client relationship has been established.