• Considering that such large amounts of money are paid for aircraft, often as much as for a house, it’s surprising that many aircraft change hands without any formal contract just on a hand shake. As there is no sure-fire way to register title to an aircraft in the same way that there is property, buying an aircraft obviously carries a higher degree of uncertainty to clear title. In fact, an country’s aviation authority’s civil aircraft register is not necessarily conclusive evidence of title.

• Since 9/11 aircraft ownership records around the world have tightened up however, there are still gaping holes in the system which can leave unsuspecting buyers of aircraft without clear title to their new aircraft – the problem is amplified when purchasing an aircraft from an overseas country where the records may be less reliable. While the USA and the European Union have the most sophisticated and reliable aircraft title recording systems, they’re still not perfect so, if you’re considering purchasing an aircraft from overseas you want to be absolutely sure of the title before paying anything; imagine your new aircraft dismantled and packed into a container ready for shipping but, being stopped at the docks and refused export because of a title problem.

• Closer to home, buying an aircraft locally or from across the Tasman isn’t without it’s own uncertainties as to clear title thus, it’s vitally important to ensure that whoever you are buying an aircraft from is the real owner of the aircraft but, not only that; what about mortgages, liens and/or caveats over the aircraft – in fact does the seller have the right to sell you the aircraft at all? It should be appreciated that the seller of an aircraft is unable to legally affect a transfer of title to the purchaser if he/she did not have ownership of the aircraft in the first place. This may come about because of a defect in the transaction when the seller originally acquired the aircraft.

• Also of concern is the fact that many aircraft maintenance engineers retain ownership of parts supplied by them until they are paid for. Expensive parts may therefore be recovered if it turns out the seller has not paid their bill. Aircraft can also be subject to a charge in favour of Airservices Australia for unpaid airways charges and such like. Charles Pratten Managing Director of leading aviation insurance broker Civil Aviation Insurance, says that it is not uncommon for new owners to find out that their new aircraft is owned by someone other than who they purchased it from; “we sell a lot of ground cover insurance being requested where someone’s new aircraft is locked up for months, even years, while a dispute over ownership is sorted out’

• More often than not in matters where ownership is in dispute, it will be a case where another person had/has a beneficial interest in the aircraft or part ownership in the aircraft; for instance a creditor of a bankrupt person or company – even an ex-life partner of the aircraft seller’s who might be seeking half of the proceeds of the sale and might be entitled to exercise a lien over the aircraft until the matter is settled; you could find yourself tied up in the middle of a family law matter which can take years to finalise.

• One issue of great concern is if the seller is a company then there is a strong likelihood that there is a charge over its assets to secure finance. [a kind of floating mortgage]. If there is such a charge then it is likely that it will cover the aircraft. Accordingly it is necessary to have this discharged before the purchaser pays over the purchase price. So, before purchasing an aircraft we highly recommend you have a ‘Title Search’ carried out by an industry professional with experience in this field - So how do you figure out if they are an industry professional? – well one of the ways is to ask for a copy of their resume’ and their Professional Indemnity Insurance Certificate of Cover specifying they are covered for carrying out aircraft title searches…..they won’t have one if they’re haven’t proved to an insurer that they know what they are doing. But, check with us first and we’ll help steer you in the right direction.

• A title search and report should include:-
  
  
  • details of the ownership of the aircraft;
  
  
  • details of the aircraft’s lien/charge status, including confirmation from any documented financier as to the status of the finance on the aircraft [outstanding or paid out]
  
  
  • a Statutory Declaration of Ownership from the seller;
  
  
  • bankruptcy search of the seller;
  
  
  • general checks and enquires with the aircraft’s usual maintenance facility with regard to outstanding payments etc’ where a lien may occur or be in effect;
  
  
  • proof of purchase from the previous aircraft owner, with verbal confirmation if possible;
  
  
  • confirmation of details and documentation of ownership and interests held by the relevant country’s Civil Aviation Authority or in the case of a non-GA type sports aircraft similar documentation confirmation from their governing body if such exists;

• Aircraft Online’s ‘Title Search Unit’ can provide title search services for you at low prices starting at AUD$300.00 – or why not do it yourself by downloading a free copy of Aircraft Online’s DIY’ Title Search Steps and Procedures. Download for free here In addition to the ‘Title Search’ always make sure you have an independent licensed aircraft maintenance engineer carry out an inspection of the aircraft and the aircraft’s log books and to report on any accidents and/or incidents or major alterations and/or repairs to the aircraft.

• Make sure it’s not an engineer who has worked on the aircraft previously and make sure it’s not done by the engineer who you will engage to carry out the aircraft’s future maintenance – use someone who has no connection with the aircraft and who holds a valid Professional Indemnity policy of insurance because, without it you have no added protection

• As for insurance of an aircraft’s title; Civil Aviation Insurance has access to specialist aviation industry insurers who offer aircraft title policies that insure the validity and enforceability of your interests and preserves the priority of that interest in the aircraft. ‘Aircraft Title Insurance’ has advanced protection guards against many problems that could imperil your interest in an aircraft and include coverages not easily obtained under standard endorsements to ordinary aviation insurance policies. To find out more how Civil Aviation Insurance can help you with a range of aviation insurance services; please click here

• You wouldn’t buy an aircraft without getting it checked out mechanically and structurally by a licensed maintenance engineer – so why would you
  buy an aircraft before getting the title check out?

After helping hundreds of aircraft owners sell their aircraft, helicopters and aviation accessories online, we’re been able to establish some helpful tips on how best to advertise your aircraft for sale; click here to get tips on how to sell your aircraft.