A security interest in an aircraft engine can be perfected only in the manner required by federal law. Federal law excludes by preemption the recording of title to or liens against aircraft, so that a transfer that is not recorded under the federal system is not effective. Security Interests in Engines less than 550 horsepower are not eligible for recording. A security interest in an aircraft is perfected by filing with the Aircraft Registration Branch of the Federal Aviation Administration.
Title: California Security Agreement Granting Security Interest in Aircraft Engine: Explained Keywords: California security agreement, granting security interest, aircraft engine, types Introduction: A California Security Agreement Granting Security Interest in Aircraft Engine is a legal document that creates a security interest or lien in an aircraft engine. This agreement serves as a means of providing collateral for a loan or financing arrangement where the aircraft engine is pledged as security. Let's explore the details of this agreement and its various types. Types of California Security Agreements Granting Security Interest in Aircraft Engine: 1. General Security Agreement (GSA): The General Security Agreement creates a security interest in an aircraft engine and any other assets of the debtor. While it covers the entirety of the debtor's assets, the GSA is particularly relevant for aircraft engines as it includes the engine's ownership rights, security documentation, and operational control. 2. Specific Aircraft Engine Security Agreement: This type of security agreement focuses solely on a specific aircraft engine. It outlines the rights, title, and interest the secured party (lender) holds in that particular engine, along with the conditions under which this security interest applies. 3. Chattel Mortgage: A Chattel Mortgage is a type of security agreement wherein the lender retains a security interest in the aircraft engine until the debtor repays the loan in full. The mortgage provides protection for the lender against default or non-payment by the debtor, allowing them to repossess and sell the engine to recover their outstanding debt. 4. Conditional Sales Contract: Similar to a Chattel Mortgage, a Conditional Sales Contract creates a security interest where the ownership of the aircraft engine transfers to the debtor upon full payment. Until the final installment is paid, the secured party maintains the right to repossess the engine as a form of collateral. Key Elements of a California Security Agreement Granting Security Interest in Aircraft Engine: 1. Parties Involved: The agreement identifies the secured party (lender) and the debtor (borrower), including their legal names and contact details. 2. Aircraft Engine Description: The agreement specifies the make, model, serial number, and other relevant details of the aircraft engine being pledged as collateral. This information helps differentiate the specific engine under the agreement. 3. Grant of Security Interest: This clause outlines the lender's rights, interest, and security in the aircraft engine, securing the debt owed by the debtor. 4. Terms and Conditions: The agreement defines the terms of the loan or financing arrangement, including the loan amount, interest rate, repayment schedule, and any additional provisions such as default conditions or governing law. 5. Default and Remedies: In case of non-payment or borrower default, this section highlights the actions the lender can take, such as repossession, sale, or legal proceedings, to recover the outstanding debt, interest, or costs incurred. Conclusion: A California Security Agreement Granting Security Interest in Aircraft Engine is a vital legal document that protects the rights of lenders in aircraft engine financing arrangements. By understanding the types of agreements available, both lenders and borrowers can effectively navigate the intricacies of aircraft engine security interests to ensure a fair and secure loan or financing transaction.
