If you would like to record a security agreement there are a few things you must fill in to do so before it it is sent to the Aircraft Registration Branch. Your security agreement, according to the FAA must give the names of the parties on the agreement as well as contain words that state that the aircraft owner grants the security part a security interest in the collateral. It also must identify the collateral by the manufacturer name as well as its model designation, serial number, and the n-number. Your security agreement must have ink signatures of both the debtors and the craft owner showing the signer’s title where appropriate. Lastly, it must include a recording fee that total’s $5 for each item of collateral be it engine, aircraft, propellor or location. You can make money order or check payable to the FAA (Federal Aviation Administration).
If you wish to use other forms of collateral you do have options to do so, besides the use of engines, ‘engines and propellers capable of more than 550 r ated take-off horsepower, propellers capable of absorbing more than 750 rated take-off horsepower, and air carrier spare parts locations may be identified as individual items of collateral.’ You may also use the model name, manufacturer name, and serial number to describe the propellers and engines. Furthermore, you should use the address (including the state and city) to describe the location of any spare parts.
When the FFA receives the recorded security statement they will then return to the part a Conveyance Recordation Notice (AC FORM 8050-41). This notice will describe the aircraft (including propellers, engines, and locations) and will list the parties and dates of the agreement. It will also show the FAA recording number as well as the date of recordation. You are then legally allowed to use that form as a release when/if the secured party sign and returns it t the Aircraft Registration Branch. Another acceptable form of release is a letter that has been signed by the secured party that contains that same said information. It must include a statement releasing all of the secured party’s rights and interest that are tied to the aircraft, propeller, engine or collaterals.
