find out how the latest regulations affect your business
Florida lien law has just changed (for the better). In the past, only those in possession of an aircraft were allowed to file liens against it. In effect, this precluded most aviation service providers from charging a lien to secure payment.
But the law of the land has changed. You no longer need possession to perfect an aircraft lien in Florida. Find out what this means for you.
back to basics: WHAT IS A LIEN?
Generally speaking, a lien is a claim against property. It’s a legal process through which you can file an instrument to force payment on a debt.
Aircraft liens are service liens. In other words, if you perform a service on the aircraft of another, you may be entitled to file a lien to secure payment. A lien is filed by recording a specific instrument with the Clerk of Court in a specific county. That lien is then also filed with the FAA.
If the aircraft owner doesn’t make a prompt payment, or altogether skips the bill, you may then foreclose on the lien to recoup what is owed to you.
WHY ARE AIRCRAFT LIENS DIFFERENT?
Well, there’s a catch. You can’t file a lien just because you’re owed money. You may only file a lien if your claim fits specifically within the parameters of an existing lien law. And in Florida, until now, you needed possession of an aircraft to file a lien.
Say, for example, an aircraft owner (or a management company) approached you to upgrade the avionics on a particular aircraft. You provided a quote, rendered the service, and then returned the aircraft to its owner along with a hefty bill. Now, say that aircraft owner didn’t honor the invoice and simply refused to pay for your services. In theory, you would have the right to file a lien to secure payment.
In practice; however, you could not. At least not in Florida. And not until now. This is because Florida required you to have possession of an aircraft to file a lien. In the past, once you released that airplane back to its owner, your right to a lien was gone with it.
Until now, Florida didn’t have a specific lien law to deal with aircraft. As a result, lawyers had to rely on a generic law that didn’t take into account the portability of airplanes. Undeniably, aircraft have a unique set of characteristics that merit special considerations. After all, you can simply fly an airplane away and leave your debts on the ground. This is exactly what happened to Commercial Jet, Inc., which prompted serious conversations in the State of Florida about how we handle aircraft liens.
And so, Florida House Bill 975 was conceived.
WHAT IS THE NEW FLORIDA LIEN LAW?
Aircraft liens are no longer possessory liens in the State of Florida. In other words, you no longer need custody of an aircraft to file a lien to secure payment on that debt.
The legislature has amended the aviation laws to provide this industry much-needed relief. To that end, Fla. Stat. 329.51 , which applies to labor liens, and Fla. Stat. 329.41 , which applies to fuel liens, now indicate that a “lienor is not required to possess the aircraft to perfect such lien.”
SO CAN I FILE A LIEN FOR SERVICES ALREADY RENDERED OR FOR FUEL ALREADY PROVIDED?
Maybe. The new law has an effective date of July 1, 2019. Which means, it doesn’t apply to causes of action that arose before that specific day.
In addition, the law has a “timer”, so to speak. You must file a lien “within 90 days after the time the labor, services, fuel, or material was last furnished.” So, it’s really a math question. If you last provided services after July 1, 2019 and you’re within 90 days of that specific date, then may be entitled to file a lien. Even if you no longer have possession of that specific aircraft.
WHO WILL BENEFIT FROM THIS NEW LAW?
This amendment has far-reaching consequences for many stakeholders in the aviation industry. In the past, FBOs unfairly benefited from the “possession requirement”. After all, FBOs typically maintain custody of an aircraft during overhauls or sale transactions. This left individual service providers without rights to claim their debts.
In effect, every avionics, maintenance, repair, and A&P shop will now have the right to file a lien. But it remains to be seen how courts will implement this new law.
But one thing is certain, the Florida aviation industry is now better protected.
And, you should know that this bill was passed unanimously in the House and Senate. Maybe aviation really does bring people together.