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Buying an Aircraft at a Forced Sale — Playbook and Underwriting Checklist

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Buying an Aircraft at a Forced Sale — Playbook and Underwriting Checklist

Playbook page. Legal information, not legal advice. Last verified: 2026-10-16.

This playbook sequences the checks a purchaser runs before bidding on an airplane, helicopter or engine offered at a sheriff’s/marshal’s sale, judicial or bankruptcy sale, UCC repossession sale, mechanic’s- or storage-lien sale, airport abandoned-aircraft sale, IRS levy sale or forfeiture sale. Law and channel mechanics are on aircraft, aircraft-title-liens-and-the-faa-registry, cape-town-convention-aircraft and aircraft-mechanics-liens-and-non-judicial-sales.

Step 1 — Identify the channel and the seller’s authority

If the seller is…The authority to verifyPaper the FAA will want from the seller
Sheriff / marshal (execution)Writ, levy, state execution procedure (sheriff-sale)Officer’s bill of sale “stating that the sale was made under applicable local law” (14 CFR § 47.11(c))
Court-ordered foreclosureJudgment/order of saleForm 8050-4 + security agreement + bill of sale (§ 47.11(b)); certified foreclosure order (AC 8050-94, item 13)
Bankruptcy trustee / DIP§ 363 sale order; the specific § 363(f) ground; § 363(m) good-faith finding (bankruptcy-363-sales)Order appointing trustee (AC 8050-94, item 38); court order (§ 47.11(d))
Secured lender / lessorDefault, security agreement, UCC § 9-611 notices, commercially reasonable disposition (§ 9-610(b))Form 8050-4 + security agreement + bill of sale (§ 47.11(b))
Repair shop / FBO / hangarThe lien statute, notices and waiting periods (e.g., Tex. Prop. Code §§ 70.304–70.305)Bill of sale + statute citation + compliance statement + documentary evidence (AC 8050-94, item 15)
Airport operator / local governmentAbandonment statute (RCW 14.08.122(4); Tex. Transp. Code § 22.901)Bill of sale or court order
IRS26 U.S.C. § 6335 levy saleCertificate of sale (§ 6339(a)); FAA treatment needs_verification
Federal forfeitureDeclaration or decree of forfeiture (19 U.S.C. § 1609; 21 U.S.C. § 881)needs_verification

Step 2 — Fix the aircraft’s identity

Record make, model, manufacturer’s serial number and N-number of the airframe, and make, model and serial number of each engine (and propeller, if 750+ shaft horsepower). These are the identifiers recordable conveyances must carry (14 CFR §§ 49.33(b), 49.43(a)) and the three criteria of an International Registry priority search (ICAO Doc 9864, Regs. § 7.2). Engines can be owned and financed separately from the airframe (Aircraft Protocol art. XIV(3)), so a mismatch between installed engines and the record matters.

Step 3 — Search the FAA record

  • Online inquiry (no charge): N-Number, Serial Number, Name, Document Index, Engine Reference and Expired Pending Cancelation queries; updated nightly (faa-aircraft-registry).
  • Full aircraft record: USD 10 on CD (or USD 0.10/page; an average paper record is 76 pages); USD 10 to certify (FAA records page). Read every recorded security agreement, lease, lien notice, release, IDERA, and the chain of conveyances back to the last registered owner (§ 47.35(a)(2); § 49.35).
  • The FAA “does not perform title searches”; a buyer reviews the record personally or through an attorney or aircraft title company (FAA, “Clear Title”).
  • Confirm each recorded lien either (a) is the one being enforced, (b) is junior and discharged by the sale under the governing law (e.g., UCC § 9-617(a)(3)) — noting that the FAA’s published release mechanism is a signed release by the secured party (AC 8050-93, item 16), or (c) is senior and will survive.

Step 4 — Search the International Registry (Cape Town objects)

If the airframe, helicopter or any engine meets the Protocol thresholds (8+ persons or 2,750+ kg; helicopter 5+ persons or 450+ kg; engine 550+ shp or 1,750+ lb thrust — Protocol art. I(2)), order a priority search certificate for the airframe and each engine. Fee USD 27 per priority search; user set-up USD 240/yr (Doc 9864, Procedures App. Table 1, 1/1/25). A buyer takes “subject to an interest registered at the time of its acquisition” (Aircraft Protocol art. XIV(2), which replaces Convention art. 29(3) for aircraft objects).

Step 5 — Search for liens that are not in the FAA file

  • Federal tax liens: not recordable at the FAA (14 CFR § 49.17(a)(2)). Search the filing office designated by the state where the taxpayer resides (individual) or where the principal executive office is located (corporation/partnership) (26 U.S.C. § 6323(f)(1)(A)(ii), (f)(2)).
  • Possessory liens: ask who has physical custody and why. A repair lienor “continuously in possession” outranks a filed federal tax lien (26 U.S.C. § 6323(b)(5)) and, by default, security interests (UCC § 9-333(b)) unless the statute provides otherwise (e.g., A.R.S. § 33-1022(B); R.I. Gen. Laws § 34-47-4).
  • County-filed aircraft liens: Florida lien notices are recorded with the circuit-court clerk where the aircraft was located (Fla. Stat. § 329.51); Arizona with the county recorder (A.R.S. § 33-1022(C)); Texas foreign/unregistered-aircraft liens with the Secretary of State (Tex. Prop. Code § 70.3031).
  • FAA civil-penalty lien / forfeiture exposure: 49 U.S.C. §§ 46304, 46306(d); 21 U.S.C. § 881(a)(4). No public index for these was identified — needs_verification.

Step 6 — Audit the sale process

Match the seller’s file to the governing statute: notices sent (to whom, how, when), waiting periods, publication, public vs. private sale, and any court order. Examples:

  • UCC: notice to debtor, secondary obligors and FAA-recorded secured parties (§ 9-611(c)(3)(C)); commercially reasonable disposition (§ 9-610(b)). A good-faith transferee takes free of the discharged interests even if the secured party did not comply (§ 9-617(b)).
  • Texas lien sale: certified/registered-mail notice to the registered owner and FAA-record lienholders within 60 days; sale only after the 90th day (§§ 70.304–70.305).
  • Arizona possessory lien sale: 20 days unpaid, demand, 10 more days, then public auction on 5 days’ notice or two publications (§ 33-1023).
  • Washington airport sale: 90-day presumption, 20 days’ registered-mail notice, publication 10–20 days before sale; regulations must be posted and adopted (RCW 14.08.122(4)–(5)).
  • Cape Town chargee sale: written notice to interested persons; 10 working days deemed reasonable (Convention art. 8(4); Protocol art. IX(4)).

Step 7 — Maintenance records, airworthiness and ADs

ItemRuleWhat the buyer looks for
Records that must transfer at saleOwner/operator retains, and “shall … transfer with the aircraft at the time the aircraft is sold,” the § 91.417(a)(2) records (§ 91.417(b)(2)); seller “shall transfer to the purchaser, at the time of sale” those records (§ 91.419)Total time on airframe, each engine, propeller, rotor; life-limited parts status; time since overhaul for items with specified overhaul times; current inspection status; current AD status “including, for each, the method of compliance”; Form 337s for major alterations (§ 91.417(a)(2)(i)–(vi))
Annual inspectionNo operation unless, “within the preceding 12 calendar months,” an annual inspection under Part 43 (§ 91.409(a))Date and signer of last annual; 100-hour inspections if used for hire or instruction (§ 91.409(b))
AD complianceOperating a product that does not meet an applicable AD is a violation (§ 39.7); owner/operator “is primarily responsible for maintaining that aircraft in an airworthy condition, including compliance with part 39” (§ 91.403(a))AD list against records
Airworthiness certificateMust be aboard and displayed (§ 91.203(a)(1), (b)); effective “as long as the aircraft is registered in the United States” and maintained under Parts 43 and 91 (§ 21.181(a)(1))Presence of the certificate; category
Getting a non-airworthy aircraft outSpecial flight permit to fly “to a base where repairs, alterations, or maintenance are to be performed, or to a point of storage,” or for “Delivering or exporting” (§ 21.197(a)(1)–(2))Feasibility and cost of ferry vs. disassembly and trucking
Engine time vs. overhaul intervalTime since overhaul is a required record (§ 91.417(a)(2)(iii)); manufacturer overhaul intervals (TBO) are not set in the retrieved regulationsRemaining time vs. manufacturer recommendation; reserve for overhaul

A forced-sale seller (sheriff, lender, lienholder, airport) may not possess the logbooks; the regulations place the keeping and transfer duty on the “registered owner or operator” (§ 91.417(a)) and the “owner or operator who sells” (§ 91.419). Missing records leave AD status and life-limited-part status unestablished.

Step 8 — Tax, import/export and registration eligibility

  • Buyer eligibility for U.S. registration: 49 U.S.C. § 44102(a); 14 CFR § 47.3.
  • Sales/use tax examples: Florida taxes “Each occasional or isolated sale of an aircraft” at the 6 percent rate (Fla. Stat. § 212.05(1)(a)1.b.), with a dealer-sale nonresident exemption conditioned on removing an aircraft from Florida within 10 days after purchase (or 20 days after repairs) and later documentation (§ 212.05(1)(a)2.). Texas exempts listed aircraft sales — including a sale “to a person for use and registration in another state or nation before any use in this state other than flight training … and the transportation of the aircraft out of this state” (Tex. Tax Code § 151.328(a)(4)) — and defines exempt “occasional sales” (§ 151.304). Whether a sheriff’s, lienholder’s or repossession sale is taxable or “occasional” in a given state is needs_verification.
  • Export: cancellation of U.S. registration requires the holder’s request, satisfaction or consent of recorded-right holders, and certification that prior-ranking registered interests are discharged or consent (14 CFR § 47.47(a)); with an IDERA on file, only the authorized party may request it (§ 47.47(b)).
  • Import of a foreign-registered aircraft: proof the foreign registration has ended and, for a Cape Town state, that prior-ranking interests are discharged or consent (§ 47.37).
  • Treasury notice: a person with an ownership interest “shall file a notice with the Secretary of the Treasury that the Secretary requires by regulation, not later than 15 days after a sale” (49 U.S.C. § 44109(a)); the implementing regulation was not retrieved — needs_verification.

Step 9 — Closing and registration

  1. Obtain the channel-specific evidence of ownership (Step 1) with the “applicable local law” statement where § 47.11(b)(3) or (c) requires it.
  2. File promptly: an unrecorded conveyance is valid only against the maker, heirs/devisees and persons with actual notice (49 U.S.C. § 44108(a); philko-aviation-v-shacket-1983); filing is effective when received (14 CFR § 49.19).
  3. Submit AC Form 8050-1, the evidence of ownership and the USD 5 fee (§§ 47.17, 47.31).
  4. Carry the second copy of the 8050-1 as temporary authority within the U.S. if the aircraft was last registered in the U.S. (§ 47.31(c)).
  5. Update 406 MHz ELT registration with NOAA on purchase (FAA, “Register an Aircraft,” which states registering or updating “is free, easy, and required,” citing 47 CFR 87.199(f)).
  6. Notify the Registry of address changes within 30 days (§ 47.45).

Underwriting checklist

#CheckWhereCostTime
1Registered owner, status, document index, expired-pending-cancellationFAA Registration Inquiry (online)None statedImmediate; data updated nightly
2Full FAA aircraft record (liens, releases, leases, IDERA, chain)FAA Aircraft Registration BranchUSD 10 CD / USD 0.10 per page; USD 10 certificationneeds_verification (processing time not published on retrieved page)
3Engine-specific liens (≥550 hp)FAA Engine Reference Inquiry + recordAs aboveAs above
4International interests (Cape Town objects; airframe and each engine)International Registry priority searchUSD 27 per search + USD 240/yr user set-upElectronic (“All searches shall be performed by electronic means”)
5Federal tax liensState/county filing office for the owner’s residence or principal executive office (26 U.S.C. § 6323(f))Office-specificOffice-specific
6County/state-filed aircraft liense.g., Florida circuit clerk (§ 329.51); Arizona county recorder (§ 33-1022(C)); Texas Secretary of State (§ 70.3031)Office-specific (Texas SOS filing fees USD 15/30/5 per § 70.3031(d))Office-specific
7Possessory liens and accrued storage/hangar/fuelCustodian (FBO, repair station, airport)Payoff amountOngoing accrual
8Seller authority and notice complianceSeller’s file; court docketAttorney reviewBefore bid
9Logbooks, AD status, annual, life-limited parts, time since overhaul, Form 337sRecords (14 CFR § 91.417(a)(2))Mechanic/inspector reviewBefore bid where access allows
10Airworthiness certificate aboard; ferry feasibilityAircraft; FAA Flight Standards for special flight permit (§ 21.197)——
11Sales/use tax exposureState revenue law (e.g., Fla. Stat. § 212.05; Tex. Tax Code §§ 151.304, 151.328)Rate × priceAt registration/use
12Export/import constraintsFAA record (IDERA, § 47.47); foreign registry (§ 47.37)——
13Insurance in place before ferry or hangar moveInsurerMarketBefore taking possession

▸ For Buyers / Operators. A forced sale transfers what the law of that channel transfers — generally the debtor’s interest, free of the enforced interest and subordinate interests, and subject to senior FAA-recorded and International-Registry-registered interests (UCC § 9-617; Aircraft Protocol art. XIV(2)). The biggest swing factors are a senior lien that survives, a federal tax lien outside the FAA file, a separately financed engine, and missing records.

▸ For Owners / Debtors. The same checklist shows what a sale must have complied with — notice parties, waiting periods, and surplus handling (UCC § 9-611; Tex. Prop. Code §§ 70.304–70.305; A.R.S. § 33-1023; RCW 14.08.122; Convention art. 8(4), (6)). See aircraft-title-liens-and-the-faa-registry for surplus rules.

Needs verification

  • FAA processing times for record copies, registration and recording.
  • FAA acceptance of IRS certificates of sale and forfeiture documents.
  • Whether forced sales are taxable or exempt “occasional” sales in specific states.
  • Treasury implementing regulation for 49 U.S.C. § 44109.
  • Public index (if any) of FAA civil-penalty liens or pending forfeiture actions against aircraft.

aircraft, aircraft-title-liens-and-the-faa-registry, cape-town-convention-aircraft, aircraft-mechanics-liens-and-non-judicial-sales, faa-aircraft-registry, philko-aviation-v-shacket-1983, due-diligence-checklist, sheriff-sale, bankruptcy-363-sales, federal-tax-liens

Sources

Disclaimer. This page is legal information, not legal advice. It is a general, operational summary that may be incomplete or out of date; law, fees and agency procedure change and their application is fact-specific. Nothing here creates an attorney-client relationship. Verify every statute, regulation and fee against the current primary source and consult a licensed attorney before acting.

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