This is the beginning of the end of your quest. These final steps are important to insure that you are completing the transaction legally and wisely.

The list of important areas include the title search, FAA Lien Form, release of lien, seller's Bill of Sale, buyer's FAA Registration application, bank wiring instructions, state registration, tax issues, and delivery considerations.

Title Search
This can be started anytime after the "Purchase Offer" is initially accepted. It is usually done by the escrow agent or by whomever is holding the deposit. They may charge a few hundred dollars, but they more than earn their fee. Title services located in Oklahoma City will physically review the computerized FAA registry for a particular plane. Among other things, this search will reveal the actual name of the current owner. That same name must be on the FAA Bill of Sale before any money changes hands! It will also reveal the name of the financial institution holding a lien and security agreement, if any. This lien, a FAA Form, originally filed by the seller's bank and returned to that institution with an identifying number must also be presented with a proper "sign-off" release signature before any money changes hands. The escrow agent will be responsible for these above details.

FAA Lien Form (AC Form 8050-41)

Part I of this form, the Conveyance Recordation Notice, is initially completed by the seller's bank at the time that the seller originally purchased the airplane, borrowed money and signed a security agreement pledging the plane as collateral. Its purpose is to acknowledge the recording of a security conveyance covering the collateral shown, namely the plane. The buyer experiences this, too, if money is being borrowed to purchase a plane.

Part II of this form, the Release, is very important to the buyer! Its purpose is to show evidence that the collateral has been released from the terms of the conveyed security agreement, because the loan has been paid off. NO MONEY SHOULD CHANGE HANDS UNTIL THIS DOCUMENT IS COMPLETED PROPERLY. Banks, attorneys, aircraft loan specialists and aircraft sales professionals can assist the buyer at this stage.

Most of the problems associated with this form are:

1. It never gets filed initially, so the FAA doesn't show a record, but the bank does. In this case a new form is initiated, if the original can't be found.
2. It gets filed and recorded, but gets misplaced once it is returned to the bank by the FAA. Again, a new form can be initiated. Once this form and the Bill of Sale were both misplaced when the bank's law firm's was told to file them. The clerk did, but not with the FAA. 5 years later both documents showed up in the clerks file cabinet, much to everyone's embarrassment.
3. It gets filed, recorded, and returned to the bank properly. But, when the loan is paid off, it doesn't get properly signed, as released, and sent back to the FAA. This is what typically happens. Fortunately, all the financial institution has to do is to dig through its files, sign it and send it to the FAA through the escrow agent. Actually, this can go on many years without discovery until it comes time to sell the plane.

An aviation escrow agent and/or aircraft sales professional can assist you in this area if you have any difficulties.

Bill of Sale (AC Form 8050-2)
Unlike automobiles, aircraft are not "titled", much to the dismay of first time buyers. The only legally recognized owner of a U.S. registered aircraft is one who has submitted evidence of ownership (this form) along with the Application of Registration to the FAA. It is the seller's responsibility to insure that this form is properly completed and delivered to the buyer, the bank or the escrow agent. This form is then forwarded to the FAA. Only when the FAA has recorded all pertinent information on the computer in Oklahoma City is the "buyer" considered the new "owner". This form is available from the local FAA office. It also has instructions on it for completion.

Four TIPS are in order:

1. It is not required to insert the exact amount paid for the plane. In the blank "$____" box at the top, "$1.00 +OVC" (short for "other various consideration") is acceptable.
2. Be certain that the seller's name is EXACTLY as it appears on the old FAA Registration Form previously completed and found on the aircraft. If a ".", a "," or anything is different, or there has been an erasure or correction, the form will be returned, thus delaying the process and making the buyer vulnerable to fraud.
3. If the seller's name is different than the registration, be sure there is a Bill of Sale showing the chain of ownership to the present seller. This usually happens when several dealers have traded planes and the paperwork has yet to be recorded with the FAA before the current buyer arrived on the scene.
4. If both copies are being submitted to the FAA, be sure both are signed. The bottom of the second copy has no carbon paper.

The escrow agent or sales professional can assist you with this critical document.

Aircraft Registration Application (AC Form 8050-1)
It is the buyer's responsibility to complete this document and forward it to the FAA with the Bill of Sale and Release of Lien, if any. The escrow agent, bank or sales professional typically assures that this is done. The name on the registration must be EXACTLY the same as that on the Bill of Sale. It must be signed by the new owner or officer of the company. VERY IMPORTANT-the "pink copy" must be removed and placed in the aircraft before the rest of the application is forwarded to the FAA. Within 90 days, a permanent Registration will be returned to the address on the application. Replace the "pink copy" with this permanent one.

State Registrations
Many states require that aircraft sold and /or hangared in their states be registered. If you are uncertain as to the requirements in your state, you may contact your state's department of transportation or an aircraft sales professional. Most states also send out investigators, who check the "N" numbers of aircraft hangared in their state. So, if you don't register, you will probably get a letter inviting you to do so, possibly with some penalty. They will also be interested in whether any sales tax is due!