Sep 15, 2010

FAA Adopts New Rules Regarding Aircraft Registration

In July, the Federal Aviation Administration – in an effort to improve the currency and accuracy of the Civil Aircraft Registry – amended its regulations to limit the life of an aircraft registration certificate to 3 years. This is a significant departure from current law, which places no expiration date on a registration certificate. These amendments take effect October 1, 2010. Under the new rules, all aircraft registered with the FAA at any time before October 1, 2010 must be re-registered with the Registry between November 1, 2010 and October 31, 2013. The precise deadline for re-registering these aircraft depends upon the month in which the Registry issued the registration certificate for the particular aircraft, as shown below in the Re-Registration Schedule. For aircraft registered or re-registered with the Registry on or after October 1, 2010, each registration certificate will expire on the third annual anniversary of the last day of the month in which the registration certificate was issued by the Registry. Importantly, no aircraft or registration certificates are grandfathered under the new rules, so all owners of currently registered U.S. aircraft must familiarize themselves and comply with the new rules. An owner who allows its registration to expire will need to reapply by filing AC Form 8050-1 and paying the requisite filing fee, but in the meantime may not legally operate the aircraft.

For aircraft registered with the Registry before October 1, 2010, the new re-registration rules operate as follows:

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Approximately 180 days before the scheduled expiration date of an aircraft registration (the “Expiration Date”) – as set out in the Re-Registration Schedule – the Registry will mail a notice to the owner with appropriate re-registration instructions. These notices will be sent by the Registry to the address shown on the registration application previously filed by the owner with the FAA (which might be the address of a bank or a registered agent, so coordination with those persons may be necessary).

Between 150 and 60 days before the Expiration Date, the owner may re-register its aircraft with the Registry. The application will be a new form developed by the Registry specifically for re-registration or renewal purposes and will be available on-line. If there are no changes in the ownership, address or citizenship of the owner as previously reported to the Registry, the owner may submit its application on-line. On the other hand, if any change is required, the application form must be printed, signed and mailed or hand-delivered to the FAA in Oklahoma City. In either case, the filing fee is $5.00. If a re-registration or renewal application is duly filed within this 90-day window, the owner can expect to receive a new registration certificate for the aircraft before the Expiration Date and avoid any disruption in the intended use or operation of the aircraft, both domestically and internationally. The applicable 90-day filing windows for aircraft registered on or before October 1, 2010 are shown below in the Re-Registration Schedule.

During the 60-day period before the Expiration Date, and assuming the owner has not properly re-registered, a second reminder notice will be issued by the Registry. The owner still may file an application to re-register, but with two qualifications: first, the application cannot be submitted on-line but only by mail or hand-delivery to the Registry, and, second, within this 60-day period, the Registry may not have sufficient time to issue a new registration certificate for the aircraft, meaning that the aircraft may be temporarily grounded until the re-registration or renewal process has been completed.

If, for some reason, the owner does not properly re-register or renew its registration before the Expiration Date, the aircraft registration is no longer effective and the aircraft cannot be operated legally until it is properly re-registered under FAR Sections 47.31 and 47.17. Generally, operators whose aircraft are subject to leases or loans would be in default under their loan or lease agreements if they fail to maintain FAA registration of the aircraft. The failure of the aircraft to be registered may cause a lender’s security interest in the aircraft to become unperfected. Also, aviation insurance policies may be invalidated if the aircraft should become unregistered.

The Re-Registration Schedule is as follows:
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For aircraft registered or re-registered on or after October 1, 2010, the new 3-year Expiration Date will appear on the registration certificates issued by the Registry, and the same timing and other rules set out above will apply to those registration certificates.

Over the next few weeks, owners should verify the accuracy of all registration information for their aircraft and make whatever changes with the Registry that might be necessary. This will help to ensure receipt of the Registry’s re-registration and renewal notices. Owners will then need to comply with the new re-registration rules on a timely basis to avoid any inadvertent gaps in the registration of their aircraft.

Aircraft lenders and lessees also need to be aware of the new registration rules and take appropriate steps to see that the aircraft they finance and lease remain continually registered.

If you have any questions regarding these new rules and procedures, please do not hesitate to contact us.


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