Quality Should Be Your First Consideration

The risks of filing an improper aircraft lien

On Behalf of | Apr 15, 2024 | Aviation

A lien is a legal claim against an asset, like an aircraft, to secure payment of a debt or obligation. Liens can be legitimate ways to ensure payment, but filing an improper one can result in serious legal and financial consequences.

One major risk of filing an improper aircraft lien is legal liability. You could be subject to legal action for court filing if you file a lien without proper legal grounds or documentation. It can result in costly legal fees and damages. 

For instance, the aircraft owner may have a claim against you for slander of title. If the lien is invalidated, they could be entitled to damages such as their legal fees, damages arising from the slander of title like a failed potential sale and punitive damages.

Your reputation may be on the line

Furthermore, filing an improper lien can damage your reputation and credibility within the aviation industry. It could lead to lost business opportunities as potential customers may shy away from doing business with you.

You may lose the underlying payment

If the lien is successfully challenged, it is no longer legally recognized or enforceable. You may lose the ability to collect on the debt or obligation the lien was intended to secure.

You could run into regulatory issues

Filing an improper lien can lead to regulatory complications. Aviation authorities, such as the Federal Aviation Administration (FAA), have regulations governing the filing of aircraft liens. Failing to comply with these regulations can result in fines or other penalties.

Reaching out for qualified legal guidance if you are considering filing for an aircraft lien can help you mitigate these and other risks by ensuring the lien is properly filed, with all necessary documents and in compliance with relevant guidelines.

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