Avionics News March 2015 - 65

mented steps when the customer drops
off the aircraft.
The first mechanism typically used
by repair stations is a lien by law. Many
states (but not all of them) have laws
that say when a repair station does work
on an aircraft, it acquires a lien on the
aircraft. Some states require the repair
station to retain physical possession of
the aircraft. Some states require the lien
be filed in a state or federal registry.
Some states require a prior acknowledgement by the owner. Every state's
law is different, so you need to examine
your state's laws carefully (and potentially work with a lawyer). Whatever the
peculiarities of your state's laws are, you
can help support compliance with your
state's lien laws through your standard
drop-off documentation.
The second mechanism typically used
by repair stations is a lien by agreement.
Because of the Uniform Commercial
Code and the FAA Act, this process tends
to be a little more uniform from state to
state. Because the lien is filed against the
aircraft, you need an owner-signed security agreement that provides the terms of
the lien. Make sure the person signing the
security agreement is really the owner,
or an authorized agent of the owner. You
don't want to argue later over whether the
signing party had the power to bind the
owner. Typically, you also would need
a financing statement (also known as a
UCC-2) that would be filed with a state
registry to perfect a lien, but there are
special rules for aircraft liens in the U.S.
In order to perfect a lien against a U.S.registered aircraft, you will need to file
the security agreement (not the financing
statement) with the FAA registry against
the registration number of the aircraft.
There is a small fee for this, and details
can be found on the FAA's website.
The standard drop-off documentation
could authorize a lien where bills remain
unpaid.
Customers may have a right to take
their aircraft back even if it is not airworthy. This can pose a problem for

the repair station that has unfinished
work. This is something that should
be addressed in return documentation
(addressed in the next article), but the
drop-off documentation can at least
advise the customer about the process
in such an eventuality. We recommend the drop-off documentation that
the customer signs should advise the
customer that he or she is not allowed
to remove the aircraft from the facility
until the customer has completed the
aircraft return procedure and signed the
return documentation. We will talk about
details for the aircraft return procedure
in the next article, but one reason for
establishing this closed-loop system in
which the drop-off documentation references the return procedures and documentation is because when customers do
the unexpected - like taking the aircraft
from your property before the work is

complete, removing the aircraft before
necessary FAA approval is obtained or
changing their expectations of the work
to be performed without adequately
notifying you - then this can create both
business issues and compliance issues
for the repair station. Adequate language
addressing these possibilities can help
mitigate the situation and provide a
mutually acceptable process for addressing such a situation.
Drop-off procedures with corresponding drop-off documentation for the
customer and adequate staff training
can help the repair station manage its
business processes, and can also help
provide the customer with acceptable
processes for resolving disputes in the
event that issues arise. It can help make
sure that the business process remains
as enjoyable as possible for you and the
customer. q

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Avionics News March 2015

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