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: New York Security Agreement Granting Security Interest in Aircraft Engine — Overview, Types, and Key Considerations Description: A New York Security Agreement Granting Security Interest in Aircraft Engine is a legally binding contract that establishes and governs the collateral arrangement between parties involved in the financing or leasing of an aircraft engine. This detailed description aims to provide insight into this agreement, its various types, and essential elements to consider. Types of New York Security Agreement Granting Security Interest in Aircraft Engine: 1. Purchase Agreement Security Interest: In this type of agreement, a lender or creditor provides financial assistance to a borrower or lessee for acquiring an aircraft engine. The security interest granted through this agreement ensures that the lender has a claim on the engine if the borrower fails to meet the repayment obligations or defaults on the loan. 2. Lease Agreement Security Interest: This type of agreement involves a lessor (owner) leasing an aircraft engine to a lessee (borrower). The lessor may require a security interest to protect their asset during the lease term. The lessee grants the security interest, ensuring that if they default in payment or breach the lease terms, the lessor has a right to repossess the engine. Key Elements and Considerations: 1. Parties Involved: The agreement must clearly identify the involved parties, such as the lender, borrower, lessor, and lessee. Full legal names, addresses, and relevant contact information should be included. 2. Aircraft Engine’s Description: Accurate and detailed information about the aircraft engine, including its make, model, serial number, and any other relevant identifiers, is crucial for the agreement. 3. Granting Security Interest: The agreement must explicitly state that the borrower or lessee grants a security interest in the aircraft engine as collateral for the loan or lease obligations. 4. Security Interest Priority: It is essential to establish the priority of the security interest, determining the creditor's position in relation to other potential claimants. This may involve Uniform Commercial Code (UCC) filings or registering with the Federal Aviation Administration (FAA). 5. Rights and Obligations of Parties: The agreement should outline the rights and obligations of both the secured party and the borrower or lessee. These may include insurance requirements, maintenance responsibilities, indemnification clauses, and provisions for default situations or possible remedies. 6. Dispute Resolution: The agreement should address the preferred method of dispute resolution, such as mediation or arbitration, to avoid lengthy legal proceedings. 7. Governing Law: Clearly specify that the agreement is subject to the laws of the state of New York, ensuring consistency with all relevant legal requirements. Final Words: When entering into a New York Security Agreement Granting Security Interest in Aircraft Engine, it is crucial to consult with legal professionals well-versed in aviation and finance laws to ensure compliance, maximize protection, and safeguard the interests of all parties involved. Remember, precision, thoroughness, and proper registration are paramount to the validity and enforceability of the agreement.
