Recently a client called asking whether he could assert a mechanic’s lien against an aircraft engine to which he made significant contributions. Although the engine was not yet installed on an aircraft, the client did not want to assert a lien against the aircraft to which the engine may ultimately be attached. In order to answer the question, the laws of the state in which the contribution was made must be reviewed. State law will dictate (1) whether a mechanic’s lien can be asserted against an aircraft engine and (2) what actions the lien claimant must take to “perfect” the lien claim.
Typically, assertion of a lien against an aircraft, rather than an aircraft engine, requires that the lien be recorded with the FAA Registry in order to be perfected and valid against third-parties. However, assuming a lien may be asserted by the lien claimant against an aircraft engine, and unlike assertion of a lien against an aircraft, a lien claim against an aircraft engine will not be accepted for recording by the Registry. Rather, perfection of such a lien will be governed solely by the requirements of the applicable state law. Sometimes this will require that the lien claimant retain possession of the aircraft engine and, in many instances, perfection will also involve filing of a lien statement and/or a UCC-1 Financing Statement with the appropriate state and/or county offices. Each state’s requirements are different. It is imperative that a lien claimant review the applicable law to fully understand the lien claimant’s rights and obligations with respect to assertion of a lien against an aircraft engine.
