Title Searches

[GAHorn]

I received the following email from a friend:

George, you have mentioned buying and selling a few airplanes in your time so I wanted to ask for a little advice if you don't mind.
I am buying a 172 for flight instruction, it is advertised as 2900 TT and 900 since overhaul. It was used by a flight school and appears to have good logs and a thorough maintenance history. I will be dealing with the seller's broker and they have the logs for inspection. I am planning on flying up with my mechanic for an inspection (I plan on actually doing an annual, but the young guy going with me is not an IA yet, so it won't be signed off until we get back). I will be using AIC for title searches and as an escrow service, and will only exchange funds on inspection and lien search contingencies. What else should I be doing? I know to check ADs, SBs, etc. After hearing horror stories, and experiencing my own I am very suspicious of all claims.
Thanks for your time

I responded:

Part of the reason for doing a complete annual for a "prebuy" is in order to have "accountability" from the inspector. If your "inspector" is unqualified to sign off an annual, then you will not have that protection. If he overlooks something significant, the risk will be all yours...because you knew beforehand he was unqualified. Just a reminder of that detail.

Make certain the serial numbers of engine/accys/prop/avionics are all in accordance with the equipment list and/or logs. You don't need to get her home and find out that the radios, while they are the correct models.... were actually reported stolen from another aircraft somewhere last year.... and the ones that were supposed to be in YOUR airplane are missing! If there is no traceability in that regard, then have the seller specify the ones which differ and sign a promise to be responsible to "perfect" the sale at his expense. Not a common problem, but an expensive one should it occur. (Flight schools frequently swap avionics between airplanes and fail to make proper records. You don't need to have someone else's radio in your airplane...and you don't need someone else to have YOUR radio.)

Did the flight school/former owner file bankruptcy or go out of business? Or do they have tax liens from the state or IRS? If they do, then they may not be able to provide clear title, and the FAA in OKC does not keep track of those clouds on titles. (If I declare bankruptcy or have a tax-lien against my company, then the assets (planes) will not be recorded by FAA as having burdens on their titles, but the planes are actually assets which belong to creditors. Any sale could be contested and you could lose your investment.)

Otherwise, it sounds like you have a good handle on things. Good Luck! and Congratulations!

Sincerely
George
The point is, that even a "title search" will only reveal what the FAA has been informed in a previous Bill of Sale, or court action, and may not reveal the entire story. Title insurance can be purchased thru most title/excrow services.

One more point: When accepting the aircraft be certain to have the seller sign a statement that he acknowleges, accepts, and promises to pay all obligations upon the aircraft to that date/time of sale, and that the aircraft is sold "free and clear" of all encumbrances. You don't need to get the thing home and find out there's an unpaid repair or fuel bill at some FBO tied to that tail number/serial number. YOU could end up having your airplane attached for an unpaid obligation you did not know about.

[william halford]

I bought an aircraft from a good friend of mine. I knew the airplane because it has been in our EAA chapter for good many years and I knew that it was well maintained since I was involved in the last two annuals. So I did not felt a pre purchase inspection was nessary, or a title search. I kept the aircraft for 4 yr. and put it on the market. When a buyer did a title search he found out that 15-yr. back there was a $6000.00 lean against it thru a bank. After contacting the bank the loan was paid, but the bank never let the FAA know about it. My case was just a matter of paperwork I got of lucky. But now, and in the future a title search is a must along with an Inspection. Gary