I recently helped a friend in the process of buying an airplane, and we ordered a title search as part of the due diligence in verifying that no liens exist against the aircraft if it was ever posted as collateral for a loan in the past.

Luckily, the aircraft was clean. But I asked the woman from the title search company (they are all based in Oklahoma City, presumably so they can walk over to the FAA records office) what all is involved in the search process. She said they simply review the FAA's registration records, bills of sale, etc.They have access to the same records you get when you order the CD of records on an aircraft.

I always assumed they had some secret magic back channels, some sort of REST API tied to a cluster of dark web endpoints into bank mainframes and NSA-owned Kray cryptominer timeshares that reveals the slightest hint of someone laying claim to an airplane.

Nope. Just the FAA CD. Is there more to it that I'm not aware of? What has been your experience with less-than-straightforward title search?

Wow, I would have also guessed it would be much more "involved" than that. But at least I would think if something cropped up after the purchase, you would still have some sort of recourse against the title company to recoup any financial loses you may have suffered. A guy would be hosed if there was a lien revealed after the purchase and there was no title search. Such a litigious society we live in nowadays.

The only thing that is value added from these folks is their personal relationship with the FAA folks. They can do it in a day, while you would take a couple of weeks. I like the Title service and use that every time I sell, or buy an airplane.

So, you pays your money and take your chances. I always like the idea of having the CD anyway.

gunny

I once did a title search on a C150 I was interested in that a flight school was selling. It turned up 7 liens. Some over 20 years old. The plane had gone through several owners during that time. Owner of the flight school claimed he didn't know about any of them, and didn't do a search before buying despite him using the equity of the C150 as collateral for another aircraft purchase.
Needless to say, I ran away from that deal. ALWAYS do a title search I tell prospective airplane buyers. It's surprising how many first-time buyers have no clue about this.

I used the AOPA recommended outfit last summer. They came up with a security agreement on the plane from over twenty five years before. The same guy still owns the plane today so maybe just didn't have it taken off----I didn't find out what the real deal is.

I did one that had a UCC filing on it from a bank that had been through 3 buyouts since the original loan. AIC tracked down one of the employees that had been with the bank throughout and got the filing removed. I was impressed. They have also helped me with expedited registrations on 2 other aircraft. I thought the price was fair and the service was excellent. Would use again in a heartbeat.

I've used them on each of my aircraft purchases. They saved me once from an issue. I think they're worth the cost when you take into account what your really paying for is convenience. We have become a society of instant gratification, willing to pay a bit extra when needed. I'm as guilty as anyone.

Rich

I'm not saying a title search isn't valuable, I'm saying it's not impressive the means by which they search, at least the outfit I talked to.

I'm not even saying that making heads or tails of the shitty scans of registrations and bills of sale is easy.

I'm asking: Is the FAA's registration data all-inclusive and accurate? Is it the only ledger of an aircraft held as a security?

I used the AOPA service when buying my 182. A lot of what they did I could do myself (and actually did as well), but I figure they may have some extra areas to look around liens that I may not think of. As a first time buyer I wanted a double check of the records though, especially given how loose aircraft financial records can be. I didn't do the whole title escrow thing, but for $95 I feel like I got some peace of mind that all of the paperwork was in order.

I also did the AOPA service and CD before I ever arrived to see the airplane. I didn't want to spend real money on a pre-buy, etc until I was realistically sure it would even matter, Idaho is not close to me. Even a single old lien can waste a lot of time to chase down, especially in this case where most of the previous owners weren't even alive any longer.

Would they have turned up something odd that I wouldn't have found myself eventually? Hard to say. I'd like to think so. Having a fresh set of eyes on it though is never a bad thing.

I don't think all liens are recorded with the FAA and I also don't think that at lien needs to be recorded with the FAA to stand up in court. The FAA will tell you that it is a registry, aircraft do not have a title. It is no different than when you register the deed to your house, or title a car, if the property is used as collateral for a loan, and the bank or loan company chooses not to record the lien it will not show up on a title search. That will not stop the lender from taking the collateral is the loan is defaulted on. The last loan I hand on an aircraft was ten years ago with the local bank I have used for 45 years and was for around $85,000. Even though I told them they needed to record the loan with the FAA and provided information on how to do so they choose not to and I only discovered that when I ordered a CD from the FAA.

I have had seven or eight title searches done over the years. On the last one a few years ago it was found that the president of the company which had owned the airplane had transferred it from his company to a trust for his heirs when he knew his time was getting short. He used the wrong title for his position as president of the company when he signed the bill of sale as owner instead of president. This made a later transfer to a family member invalid in the eyes of the FAA which then would have made it impossible to for ownership to transfer to the individual who I was buying the airplane from and to me. I would not have spotted this and not only did the title search company find this they also talked use though how to correct it and supplied the required forms.

I have also bought a couple of airplanes that had liens that were not signed off at a discount when the owner was not able to complete a sale when the old long ago lien showed up on the search. I them would tract down the individual and correct the problem.

sorry for the long post.

Tim

I live not far from the okc office. They do in fact keep all the records. The title search literally walks across the street and searches the days lot in minutes. Relaying that information to the customer probably takes longer.
I still use a title search because I got s--t to do!

formandfunction wrote:I live not far from the okc office. They do in fact keep all the records. The title search literally walks across the street and searches the days lot in minutes. Relaying that information to the customer probably takes longer.
I still use a title search because I got s--t to do!

I don't think it is disputed that FAA keep all the records they have, nor that they (the title company) are expedient and convenient.

I just didn't feel that confident in the findings given that they ONLY look at FAA records.

I'm curious now that this topic is going. If who ever loaned money against the plane didn't file a lien with FAA, do they really have anything to stand on if I buy the plane?

180Marty wrote:I'm curious now that this topic is going. If who ever loaned money against the plane didn't file a lien with FAA, do they really have anything to stand on if I buy the plane?

The financier will definitely feel like they do, and you will spend money fighting it if they pursue it. A thorough title search will sometimes find these hidden traps and for that reason I think it's a good idea. Also one of the escrow services which guarantees no problems (and has money on the line) will probably look deeper, but you pay more for that of course.

If someone defaulted on a loan where the aircraft is collateral, the lien holder may very well come after the plane. The sale may even be invalidated by a court if it made it that far. This is where records being so loose on aircraft is problematic, especially the older they get. After a few decades of transfers and shoddy record keeping there is going to be some risk.

My airplanes were all cheap cash deals, so no lender involved. I liked the title search company's clout with banks that had leans in the past. They can get the secretary at the bank to walk over to the file cabinet and find the past leans that had been paid off years ago when the computer still shows an unpaid lean. A twenty year old lean has probably been paid off, but she would just tell me the computer said there was a hold.

These banks change hands on a daily basis. Looking at a computer screen only tells her what has been entered. Lots of stuff never gets entered. There is history out there that even Google doesn't know.

Yes, buyer beware. Yes, if the guy has owned the airplane thirty years, it is probably true when he says he paid the note off.

contactflying wrote:My airplanes were all cheap cash deals, so no lender involved. I liked the title search company's clout with banks that had leans in the past. They can get the secretary at the bank to walk over to the file cabinet and find the past leans that had been paid off years ago when the computer still shows an unpaid lean. ....Yes, buyer beware. Yes, if the guy has owned the airplane thirty years, it is probably true when he says he paid the note off.

I had title searches done on my first two airplane purchases.
I think all they do is tell you if there are or are not liends recorded in the FAA's file on that airplane.
I don't believe they track down lien holders to verify that the lien was still in effect or not.
At least for the normal $100-ish title search.

My current airplane had a 15 year old lien on it.
The guy I bought it from (a friend) had borrowed against the airplane to buy it--
he paid off the loan within a year or two but the lien was never released.
Those banks are a lot better at recording liens than at releasing them.
Naturally the bank in question had changed hands or something,
but I managed to track them down.
It took several phone calls & emails, but I (finally!) managed to get them to send a lien release to the FAA to be recorded.
I waited a few months & got the records CD to verify that it had in fact been released-- it was.
Something to consider should you ever borrow against your airplane--
verify any liens are in fact released when you pay off the loan.
Easy to do now, with the $10 CD only a phone call and a week away.

Zzz wrote:

formandfunction wrote:I live not far from the okc office. They do in fact keep all the records. The title search literally walks across the street and searches the days lot in minutes. Relaying that information to the customer probably takes longer.
I still use a title search because I got s--t to do!

I don't think it is disputed that FAA keep all the records they have, nor that they (the title company) are expedient and convenient.

I just didn't feel that confident in the findings given that they ONLY look at FAA records.

I have never found another place that keeps info on aircraft registration.
That being said a bank note will produce a paper copy of said lein. That's pretty much it for records.
And when a bank lends money 99.99 percent of the time they file a lein with the faa to protect their interests. The problem arises when the loan is payed off and they no longer give a crap. It's common practice to just mail a release to the address on the loan at which point most people forget about it.

I have bought a couple airplanes without having help from the title outfits. The second purchase convinced me not to do that again. They are able to look through and see what the problems with the registration records are and what needs to happen to fix them. I'd rather do that before purchase next time. Would make it a smoother process.

When I sold my Ercoupe 20 years ago the purchaser paid AOPA for a title search, which turned up a lien from 26 years earlier that had not been released and claimed he should not buy the plane until it was released because the lien-holder could demand payment at any time. They offered to "begin the process of getting the lien released" if I paid $100.00, no guarantee of final cost or if it would ever be released for any amount of money. After a few phone calls to a bank that had been thru 2 mergers in 26 years I finally ended up talking to the "Comptroller of currency" in Houston, who informed me that "AOPA has been selling bad information for years and they know it" and any lien that has had no activity (payment or registered letter demanding payment) in 3 years was unenforceable, and it is the lienholders responsibility to prove the lien is still active, if they can't prove it is active they must release it on your demand. I still bought the records of my current plane when I bought it, but 20 year old liens are not worth getting to concerned about.

Hotrod180, I'm confused as usual. I had title insurance, but they gave me the information that it had been paid anyway. When I wasn't getting the information from the new bank owner's secretary, I purchased the insurance.

Dale's information about the legal death of a loan is interesting. I would always go with the insurance anyway.