FAA Lien Recording: How Lenders Perfect a Security Interest in an Aircraft
This page explains the lender's side of the FAA filing: what "perfecting" a security interest in an aircraft means, what the Registry records and what it ignores, and how priority and releases work. It is written for borrowers who want to understand why lenders insist on certain closing steps, and for sellers or private parties carrying a note.
What the law says about recording and perfecting aircraft liens
- Federal recording system. 49 U.S.C. 44107 sets up the FAA's system for recording conveyances and security instruments on civil aircraft. 14 CFR Part 49 sets the mechanics.
- Effect of filing. Under 49 U.S.C. 44108, until a security instrument is filed, it is valid only against the person who made it, that person's heirs and devisees, and anyone with actual notice. Once recorded, it is valid from the date of filing against all persons. Whether the agreement is valid in the first place is still governed by state law.
- Federal preemption. In Philko Aviation, Inc. v. Shacket (1983), the U.S. Supreme Court held that the federal recording scheme displaces state rules that would let an unrecorded aircraft transfer beat an innocent third party. The practical rule: if it isn't filed with the FAA, don't rely on it.
- UCC interplay. Under UCC 9-311, filing a state UCC-1 financing statement is neither necessary nor effective to perfect a security interest in property covered by a federal filing system like this one. Some lenders still file a UCC-1 to cover other collateral. For the aircraft, the FAA filing is what counts.
What a recordable aircraft security agreement must contain
The FAA's security agreement recording page says the document must:
- name the parties;
- contain words by which the aircraft owner grants the secured party a security interest in the collateral;
- identify the collateral by manufacturer, model designation, serial number and N-number;
- carry the ink signature of the debtor or aircraft owner, with the signer's title where one applies.
AC Form 8050-98 is an optional FAA sample. Most lenders use their own longer agreement, which also contains the borrower covenants covered in aircraft security agreement obligations. The Registry has been widening electronic filing through CARES, and a 2025 rule lets it accept non-original documents in forms it approves. The recording page still calls for the debtor's ink signature, so let the closing agent confirm the current format before signing.
What it costs to record: $5 per collateral item
| Collateral | Separately recordable? | FAA fee |
|---|---|---|
| Aircraft (airframe, including installed engines and props) | Yes | $5 per aircraft |
| Engine | Only if rated at 550 or more takeoff horsepower | $5 each |
| Propeller | Only if able to absorb 750 or more rated takeoff shaft horsepower | $5 each |
| Spare parts at a location (air carriers) | Yes, by location | $5 per location |
| Bill of sale filed with a registration application | Recorded with the application | No fee |
Piston trap: the "550" in a Continental IO-550 or TSIO-550 is displacement in cubic inches, not horsepower. Those engines are rated at roughly 280–350 hp depending on the variant, well under the 550-hp threshold. A Cessna 182, Bonanza or SR22 therefore records as one aircraft, for $5. The security agreement still lists the engines by serial number so the collateral description is complete.
What the FAA does and doesn't verify
| The Registry checks | The Registry does not |
|---|---|
| The document is a recordable type and describes the aircraft correctly | Decide whether the lien is valid or enforceable |
| The parties and signatures match its records and rules | Confirm a debt exists or what is owed |
| The fee is paid | Issue priority opinions |
| The date and time it received the document | Perform title searches |
| It then sends AC Form 8050-41 to the secured party | Record liens that were never filed with it |
The key line is in 14 CFR 49.17: recording "is not a decision of the FAA that the instrument does, in fact, affect title." That is why lenders pay for a title search and a closing agent rather than relying on the FAA filing alone.
How lenders sequence the filing at closing
- Final title update on the day of closing, to catch anything filed since the first search.
- Seller's lien releases, delivered to the closing agent against the payoff wire.
- Bill of sale plus registration application. Part 49's aircraft-recording rules apply to U.S.-registered aircraft, which is one reason the buyer's application travels in the same package.
- The lender's security agreement, with the $5 fee.
- One filing event. Everything above is filed at once, so no moment exists in which the buyer owns the aircraft but the lender's lien is unfiled.
Filing time governs even when examination lags. In late September 2026, the FAA's registration FAQ reported working on documents received around June 16, 2026. A security agreement is filed as of the date and time the Registry receives it. Once recorded, it is valid from that filing date, even if the 8050-41 reaches the lender months later.
Lien priority: first to file, with state-law exceptions
Among FAA-recorded interests, the earlier filing generally wins. State law adds exceptions. The most common is a repair shop's possessory lien for unpaid work, which some states rank ahead of earlier recorded security interests. Tax liens follow their own statutes. Lenders handle this risk by requiring a clean search, prohibiting other liens and requiring you to pay shop bills when due.
Worked example: who gets paid from a forced sale
This scenario is illustrative. After a default, the aircraft sells for $190,000 net of sale costs. Recorded claims: a first security agreement with a $150,000 balance (filed 2022), a second security agreement from an avionics loan with $30,000 owed (filed 2024), and a shop's claim of lien for $12,000 (filed 2025).
| Claimant | Owed | A: pure filing order | B: shop lien ranked first under state law |
|---|---|---|---|
| First security agreement (2022) | $150,000 | $150,000 | $150,000 |
| Second security agreement (2024) | $30,000 | $30,000 | $28,000 |
| Shop claim of lien (2025) | $12,000 | $10,000 | $12,000 |
In both cases someone is short $2,000. The priority rule decides who bears it, and whoever is short can pursue the borrower for the unpaid balance. The first lender comes out whole either way, which is why first-position lenders care so much about filing first and keeping other liens off the record.
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Releases: how the lien comes off
- Acceptable forms. The FAA accepts the original AC Form 8050-41 signed by the secured party with a release statement, or a document that describes the collateral, identifies the lien and releases all the lienholder's rights. Both must be signed in ink (FAA: Clear Title).
- Fee. The fee schedule in 14 CFR 49.15 lists no charge for recording a release.
- Timing. On a sale or refinance, the release is filed at closing with the new documents. On a straight payoff, ask the lender when it will file and get a copy.
- Also terminate any UCC-1 the lender filed, so a state search doesn't flag it later.
- Unreleased old liens are cleared by the process in aircraft lien searches.
Cape Town and the International Registry: mostly not for pistons
The Cape Town Convention has been in force for the U.S. since March 1, 2006. The FAA Registry serves as the U.S. entry point for International Registry filings, using AC Form 8050-135. Coverage is set by type certificate, not by what is in the cabin or by maximum takeoff weight (FAA: Cape Town):
- Airframes certificated to carry at least eight persons including crew, or goods of more than 2,750 kg (6,050 lb).
- Helicopters certificated for at least five persons, or goods of more than 450 kg.
- Engines: piston or turbine with at least 550 rated takeoff horsepower, or jets with at least 1,750 lb of thrust.
The Cessna 172, 182 and 206, Cirrus SR20 and SR22, Beechcraft Bonanza and Baron, Piper Arrow, Saratoga and Seneca, and Mooney M20 are all outside it. Some cabin-class piston twins certificated for eight or more occupants, such as versions of the Piper PA-31 Navajo Chieftain and Cessna 402, can fall inside it. For those, the closing agent checks the type certificate data sheet and handles the International Registry filing.
A lender's perfection checklist
- Title search, plus an update on the day of closing.
- Debtor's name matches the registration application and bill of sale exactly.
- Collateral described by make, model, serial number and N-number, with engines and props listed.
- Security agreement signed in the format the Registry accepts; $5 per collateral item.
- Filed in the same package as the seller's releases and the buyer's registration application.
- 8050-41 received and filed away. A diary note to sign and file the release at payoff.
- International Registry filing only if the airframe or engines meet the Cape Town thresholds.
What this means for you as a borrower
Expect your lender to require a closing agent, a clean title report, your name or your LLC's name to match across every document, and no other liens. None of that is optional. It is how the lender's collateral becomes enforceable. A few weeks after closing, check the document index for your security agreement. At payoff, make sure the release is filed. Your own covenants inside the agreement are a separate topic, covered in aircraft security agreements.
How this guide differs from related guides
This page covers the lender's recording and priority. The borrower's promises inside the agreement are in aircraft security agreement obligations. Reading a title report is covered in aircraft lien searches, and the owner's registration filing in the FAA registration guide. For an overview of every FAA touchpoint, see the FAA's role in aircraft ownership.
Frequently asked questions
How does a lender perfect a lien on an aircraft?
For a U.S.-registered aircraft, the lender records the signed security agreement with the FAA Aircraft Registry under 14 CFR Part 49 and pays $5 per collateral item. Under 49 U.S.C. 44108, an unrecorded security instrument is valid only against the parties, their heirs and people with actual notice. Once recorded, it is valid against everyone from the time it was filed. A state UCC-1 filing does not substitute for the FAA filing.
What does it cost to record an aircraft security agreement?
The FAA charges $5 per item of collateral: each aircraft, each separately recordable engine or propeller, or each spare-parts location (14 CFR 49.15). Engines are separately recordable only at 550 or more rated takeoff horsepower, and propellers only at 750 or more shaft horsepower. So a typical piston single costs $5 to record. Closing agents charge their own fees on top.
Does the FAA check whether a recorded lien is valid?
No. The FAA examines documents for recordability, meaning parties, collateral description, signatures and fee. 14 CFR 49.17 says recording "is not a decision of the FAA that the instrument does, in fact, affect title." Validity, enforceability and most priority disputes are questions of state law and the documents themselves. The FAA does not perform title searches either.
Which lien has priority if an aircraft has more than one?
Among interests recorded with the FAA, priority generally follows filing time: the Registry treats a conveyance as filed on the date and at the time it receives it. State law can change the result. Some states give a repair shop that keeps possession of the aircraft priority for unpaid work, and tax liens follow their own rules. Lenders therefore require a clean search and prompt filing, and they prohibit other liens.
Does the Cape Town Convention apply to my piston aircraft?
Almost certainly not. Cape Town covers airframes type-certificated for at least eight persons including crew, or more than 2,750 kg of goods, and engines of at least 550 rated takeoff horsepower. Cessna 172s and 182s, Cirrus SR22s, Bonanzas, Barons and Senecas fall below those thresholds. Some cabin-class piston twins certificated for eight or more occupants can qualify, so confirm against the type certificate.
How is an aircraft lien released after payoff?
After recording, the FAA sends the secured party a Conveyance Recordation Notice, AC Form 8050-41. At payoff, the lender signs the release section of that form, or signs a letter that identifies the lien and releases all its rights, and files it with the Registry. Both must be ink-signed. Part 49's fee schedule lists no charge for a release. Confirm it appears in the aircraft's document index.
General information, not legal advice. Perfection and priority can turn on state law and the exact documents. Consult an aviation attorney for a specific transaction.