Aircraft Lien Primer for Virginia’s Aviation Businesses

Unpaid bills for work or services provided to aircraft owners and operators can create strong headwinds and turbulence for aviation businesses, threatening to throw even the most experienced operators off course.

In Virginia, where the laws on aircraft liens are quite different than in many other states, filing an improper lien against a debtor can even lead to criminal charges being brought against you or your business.

To help aviation business owners navigate these challenges, we have provided some common questions and answers about Virginia’s aircraft lien laws and procedures.

What can I do if someone doesn’t pay me for work I did on their aircraft?

There are several legal statutes that can help you get paid depending on the type of outstanding debt:

1. Virginia’s “Mechanic’s Lien”

A mechanic’s lien provides that “Every mechanic who shall alter or repair any article of personal property at the request of the owner of such property, shall have a lien” for his or her reasonable charges. The mechanic can retain possession of the property until those charges are paid.

Mechanic’s liens only apply to actual alterations and repairs for the aircraft. They do not apply to other kinds of services such as the sale of fuel, catering, cleaning, or even inspection costs (unless accompanied by an actual repair). 

Mechanic’s liens also only apply when the owner of the aircraft requests the repair or alternation. This means your right to file a lien can be negated if the repair is requested by a lessee or any other non-owner who happens to be operating the aircraft when the debt was incurred.

2. Virginia’s “Hanger Keepers” Lien

Two statutes in Virginia’s codebook permit the keeper of a hanger or tie-down to file a lien for unpaid “storage, alteration or repair” of an aircraft.

First, Virginia Code § 43-32 provides that “Every keeper of a livery stable, hanger, tie-down or marina” shall have a lien on an aircraft for “towing, storage, recovery, keeping, supporting, and care thereof”; and also allows the hanger owner to retain possession of the aircraft until the debt is paid.” 

Virgina Code § 43.34.1 also permits a hanger keeper to obtain a lien for storage fees, but it also allows for a lien for the costs of “alteration or repair” that the hanger-keeper may be owed.

Under these statutes, the claim of lien must be filed “within 120 days after completion of alterations or repair or accrual of storage charges.” 

It is important to note that neither of these statutes extend to any other types of services except those specifically listed. They do not include things such as liens for unpaid fuel charges or other kinds of services that are not storage, alterations, or repairs.

3. Virginia’s Liens on Abandoned or Derelict Aircraft

Lastly, under Virginia Code § 5.1-2.25, an airport operator is entitled to a lien on any abandoned or derelict aircraft that has been left on airport property. This type of lien requires that the airport operator contact the FAA to confirm that identity of the owner or last owner, conduct a complete title search to confirm ownership, and then give that owner 30 days’ notice and the opportunity to pay before a title can be obtained or the aircraft can be sold.

This type of lien only applies to public-use airport owners and to the costs incurred by the airport for airport use charges and fees, transportation, storage, and removal of the aircraft. 

Is there any risk in filing a lien against an aircraft owner who hasn’t paid me?

Under Virginia Code § 18.2-213.2, “Any person who maliciously files a lien or encumbrance in a public record against the real or personal property of another, knowing that such lien or encumbrance is false, is guilty of a Class 5 felony.”

While this statute does require knowledge that your lien is false, and proof that the lien was filed “maliciously”, this statute must be considered any time an aircraft lien is being considered, and is often cited as an expressed or implied threat by upset aircraft owners when they discover a lien has been place on their title. 

Virginia’s lien statutes are not entirely clear, either, so that does not help the innocent aviation business-owner simply trying to get paid what they may be owed.

What steps do I need to follow to file an aircraft lien in Virginia?

Unlike other kinds of liens on personal property, which are usually filed only with the Virginia State Corporation Commission, liens on aircraft must also be filed with the Federal Aviation Administration. This process is explained here and includes:

1. Using the FAA website, look up the name of the current owner via the aircraft’s tail number (known as an “N-number”).
2. Obtaining the lien forms that need to be submitted.
3. Requesting a title search on the aircraft to ensure you have the correct owner and the identification of any other lien holders whom you might be competing with to get your debt repaid. Conducting a thorough title search prior to filing your lien is highly recommended to guard against the possibility of filing against the wrong person or entity and triggering the criminal statute discussed above. Numerous companies can be found online that can conduct title searches for you. They can complete the necessary forms to assert your lien as well.
4. Filing your lien. Under Virginia law, if you file your lien with the FAA, you do not also have to file with the state. But the reverse is not true—even if you file with the state, you still must file with the FAA.

We recommend filing with the state and the FAA, just to be sure that something doesn’t get missed.

What else should I know about filing an aircraft lien in Virginia?

• It is important to limit the content of your lien document to claim only those kinds of debts that these statutes allow. In short summary, Virginia law allows a lien to be filed for the unpaid costs of alterations and repairs, towing, storage, recovery, keeping, supporting, and care; and if you are an airport owner, for the costs of storage and removal or abandoned or derelict aircraft left on your airport. The statutes do not otherwise allow liens for unpaid debts for services such as fueling, catering, cleaning, or ramp fees. Asserting a claim for debts that are not specifically allowed by these lien statutes is another way to potentially implicate the criminal law statute that you very much want to avoid. 

• With each of these types of liens, the recovery to be had is generally obtained through a negotiated settlement with the debtor paying some or all of the unpaid bills in exchange for the filing of a “release of lien” and/or re-taking possession of aircraft.
• In the absence of an agreed settlement, the lien holder must file a lawsuit to obtain a court order authorizing a public sale of the aircraft. If and when the aircraft is successfully sold, the lien holder can recover the debt that he or she is owed, but must return any extra money recovered from the sale back to the owner. For these reasons, aviation businesses should do a cost-benefit analysis before pursuing this path. Sometimes only a more expensive aircraft and a significant amount of unpaid debt justify the time and legal expenses involved in pursuing a lawsuit to recover those funds.

If you need help navigating an aviation-related lien matter, please contact Doug Winegardner at dwinegardner@sandsanderson.com or at
804-783-7270.

This article is not intended to be legal advice, and any person dealing with a lien issue should carefully read and comply with all of the statutes and laws described above, as there are details, exceptions, and specific requirements that are not within the scope of this article. 

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