Aicraft Title & Registrations
14. Is a mortgage priority notice an available security instrument for aircraft financiers in this location?
Austria
In Austria, a mortgage on a moveable asset can only be established by means of an actual transfer of possession of the mortgaged property to the mortgagee. This is naturally not feasible in practice for aircraft. Under Austrian law, the instrument on the basis of retention of title is usually used. In such a case, the title remains with the lessor until final payment.
It is not very common in Austria, but in order to fulfil the requirement of delivery of the mortgaged aircraft to the mortgagee, the parties sometimes instruct the operator to hold possession of the aircraft for the exclusive benefit of, on the instruction of and on behalf of the collateral agent and not to hold possession of the aircraft on behalf of the owner.
In addition, it is required to mark the aircraft as being subject to an Austrian law pledge by affixing plates to the airframe (and ideally also to each engine) to create external visibility of the pledge.
Colombia
Ownership, mortgages, liens, leases, and security interests are all recorded in the Aeronautical National Registry.
Germany
No.
India
No, mortgage priority notices are not available in India.
Israel
Registration of a caveat over an aircraft is not an available security in Israel.
Kenya
A mortgage priority notice is not an available security instrument for aircraft financiers in Kenya.
Malta
A mortgage priority notice is not an available security instrument for aircraft financiers in Malta. However, aircraft mortgages take priority according to the date and time at which they were registered – meaning that when a mortgage is registered on an aircraft, it will take priority over any mortgages registered at a later date and time.
Mexico
While Mexican law does not recognize priority notices as security instruments, they are recognized as a measure to block, on a temporary basis, all registrations under the aircraft records while the underlying document by virtue of which the aircraft records were blocked is made available and further registered with the Mexican Aeronautics Registry. Priority notices may include security interests, liens, and title transfers, among others.
Norway
Yes. The registration in the aviation register makes it possible for external actors to take mortgage on aircraft. This makes it easier in terms of external financing. The priority of the claim depends on when the encumbrance was established. Under Norwegian law, a principle applies: “first in time, greater in right” (Latin: “prior tempore, potior jure”). See the Civil Aviation Act section 3-26.
Pakistan
Not applicable.
Panama
The aircraft mortgage is an available security instrument for aircraft financiers in the Republic of Panama and is commonly used.
Peru
No, every Agreement is recorded at the Public Registry.
Philippines
Mortgage priority notice is not an available security instrument for aircraft financers in the Philippines.
Poland
No.
Portugal
No. Only fully binding mortgages can be registered.
Romania
In Romania, an intent of setting up a security mortgage (in Romanian “intentia de a ipoteca”) is regulated expressly in relation with the registration of mortgages for immovable assets in the Land book and for movable assets in the Electronic archive for security interests in movable property. There is no express provision in relation to the registration of such intent in the Registry of securities held by RCAA.
Serbia
If the mortgage was registered before an aircraft has acquired Serbian nationality (i.e., while it was registered abroad), the Air Traffic Property Law sets forth that such a mortgage will be provisionally registered in the Registry (provided that the mortgage is indicated in the certificate of deregistration from the foreign registry) and will also retain its initial order of priority as registered in the foreign registry. However, in order for this provisional registration to become final, the mortgagee must provide the Registry with the appropriate evidence of the mortgage (the court’s act allowing the registration of the mortgage) within 30 days as of the registration of the provisional mortgage.
Slovenia
A mortgage entered in a foreign register on an aircraft which acquires Slovenian registration, and which is stated in the instrument of deletion of the aircraft from the foreign register may be entered in the Slovenian register as a pre-recorded mortgage. The pre-recorded mortgage is given the order of precedence according to the time fixed for its precedence in the foreign register.
The mortgagee in whose favour such a pre-recording is entered must justify the pre-recording within sixty days of service of the notice of entry; otherwise, such pre-recording is deleted from the register.
South Africa
No.
Sweden
No, priority and securitization (of a lien, please see above) are achieved by way of registering the right in the Rights registry. The person who first registered his or her right gets priority.
Switzerland
No, there is no priority notice available in Switzerland.
The Bahamas
At present, a mortgage priority notice is not an available security instrument for aircraft financiers in The Bahamas.
USA – Miami
It can. A lien instrument which affects interest in: (i) a specifically identified aircraft engine of 550 or more rated take-off horsepower, or (ii) a specifically identified aircraft propeller capable of absorbing 750 or more take-off horsepower may be recorded with the FAA. A recording fee of $5.00 USD is required for each engine or propeller described. The manufacturer, model, serial number, and horsepower (or its equivalent) of each engine and propeller must be shown on the security agreement. A security agreement which affects title to, or interest in, an aircraft engine, propeller, or appliance maintained by, or on behalf of, an air carrier for installation or use in aircraft, in aircraft engines or propellers, or any spare parts maintained at a designated location by, or on behalf of, such an air carrier, may also be recorded. However, the air carrier must have been certificated under Title 49 United States Code 44705. Additionally, the instrument must contain the statement that the spare parts are being maintained by, or for, an air carrier certificated under 49 USC 44705, the specific location or locations of the spare parts, and the name of the carrier.
USA – Oklahoma City
No. Only present conveyances are recordable with the FAA.