Get Your Title Search Early – Navigating the FAA Lag
As you may be aware, the FAA is working remotely. Our personnel are still in the Public Documents Room. However, the window for filing is closed. We do have a bin located in the lobby of the FAA where we can file originally ink signed documents. The documents are picked up every hour if it’s a priority filing. They are picked up every few hours for regular filings. We are able to use the electronic filing system through email at the FAA as well. However, the indexing system at the FAA is a little bit lag right now. Meaning that if we file documents on a Friday afternoon, we may not see them until Tuesday morning. So, if you were to do a title search on Thursday and something had been filed on Tuesday, you may or may not be able to see those documents. It’s important that you go ahead and order your title search early, so that we’re able to check the index throughout the transaction, and then again right at closing to make sure that nothing has been filed with the FAA.
The importance of an FAA title search is a topic we have covered a lot, and will continue to – this step, which in our opinion should be the first, is still often overlooked for no good reason. Many simply do not understand the importance and do not want to spend money without a buyer lined up.
However, because of recent, necessary changes to how the FAA processes filed documents and the associated delays, it is even more important now to start early with a title search.
We normally check the indexing system before filing documents, but we are currently working with a bit of a lag – so it is more difficult to find out exactly what has been filed on an aircraft record before closing.
In the best of times, paperwork “gaps” can occur between filing and recording documents at the FAA – getting in the way of you and your aircraft.
These days, It takes a bit more due diligence – the gaps are bigger, opening the door for numerous potential clouds on a title. Now, more than ever, it is important to have a title search performed early, and check the index right at closing, to avoid bigger problems.
If title issues are not discovered, a client may have to deal with the extra time and cost of a title clearing service, or an attorney, down the line.
Problems with a title that are not discovered early in the sales process can even kill a deal entirely just when you think the final step of exchanging funds is imminent. That is not the type of experience anyone wants to have.
For a minimal amount, a title search can find out the name of the registered owner of the aircraft and whether a bank or any other entity has an outstanding interest against the aircraft.
This is why we continue to recommend starting with a title search, and in these times, the earlier the better – so any potential issues are cleared up. We want to protect a client from the increased time, cost and heartache that paperwork gaps and title defects can cause.