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If someone does a contract flight, or a mechanic does contract maintenance for an aircraft owner and they refuse to pay after the fact, what options do they have to "encourage" the owner to pay?

One of the big problems is that this tends to happen informally:

Owner: "Hey, can you do this flight for me?"
Pilot: "Sure, I charge $xxx." "
Owner: "Okay, great. See you on Monday morning at 9:00."
Pilot: "Sounds good, see you then."

So they show up, do the flight, send an invoice, and wait. And wait.. And wait.... After a few weeks or 30 days, they send the invoice again. Give it a bit and make a phone call. Eventually it becomes clear that they just aren't that interested in paying a lone individual without the typical resources of a larger company. Unfortunately, this happens more than you would think in this industry.

It probably isn't enough money to actually go out and hire a lawyer for, but it's irritating and they want their money. It's the principle! I've heard of people placing a lien against the aircraft. Is that something that an individual can do, or do you have to hire a lawyer? Is small claims court an option?

I'm looking for an answer that describes general approaches that can be taken, as obviously specific legal advice cannot be given without details of a situation like this.

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    $\begingroup$ I'd say that Small Claims Court sounds appropriate for this. Small Claims Court generally prohibits lawyers on both sides, and limits awards to about $2,500 or less. Cases are heard quickly, without a lot of legalese, and the judge's ruling is final and binding. (details may vary state to state, so check your state) $\endgroup$ – abelenky Jan 26 '14 at 1:36
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    $\begingroup$ Is this really about aviation? In what way might the answer be different for an aviation firm compared with a limousine service, or a plumber? $\endgroup$ – DJClayworth Jan 26 '14 at 19:59
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    $\begingroup$ @DJClayworth There are aviation specific aspects to this question such as how to register a lien with the FAA, working with different states (where the aircraft is registered -vs- operated), etc. In any case, even if it wasn't specific to aviation, it is an issue that those in aviation have to deal with. $\endgroup$ – Lnafziger Jan 26 '14 at 21:42
  • $\begingroup$ @Lnafziger the legal recourse you have is the same as any other contractor or employee who gets faced with non-payment by their customer or employer. The only thing different is where you file the paperwork. $\endgroup$ – jwenting Jul 17 '14 at 10:40
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    $\begingroup$ I think this question would work better on law.SE. It's fundamentally about breach of contract, not aviation, and in any case it may be too broad to answer because any answer probably depends on the state in question. $\endgroup$ – Pondlife Jul 5 '18 at 15:34
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You should be able record a lien against the aircraft.

Avionics News ran a Legal Ease piece about just this, which is well worth reading fully:

If a lien is properly asserted, the lien claimant (the aircraft mechanic) has encumbered the aircraft in question, meaning the aircraft no longer has clear title.

Clear title is highly desirable to an aircraft purchaser, who can determine if an aircraft has any liens on its title through a simple title search. Once there is a lien on an aircraft, to sell the aircraft with clear title, the aircraft owner must obtain a release from the lien claimant. This means the owner must pay you for your services before they are able to sell the aircraft with clear title.

If the owner fails to pay the lien claimant to have the lien lifted, the aircraft will be sold subject to the lien. This means the aircraft does not have clear title, and although the aircraft will have a new owner, your lien will remain in effect.

Most buyers, however, will not purchase an aircraft subject to a lien, and thus, you usually will manage to receive the money owed to you when the owner decides to sell the aircraft.

If you do not want to wait for the aircraft to be sold to satisfy your lien, you can bring a foreclosure proceeding, forcing the sale of the aircraft, usually at an auction.

The proceeds from this sale go to the lien claimant to extinguish the lien. If the proceeds are greater than the lien, any money exceeding the amount of the lien goes to the aircraft owner. Additionally, if there are no bidders at the sale (an unusual occurrence), the aircraft may be given to the lien claimant for the price of the lien.

One thing worth bearing in mind, is the Aero Liens List - a free resource which lists liens placed against aircraft owners. If your new client is on their "deadbeat client list" then you may want to think twice about doing the trip or get paid in advance!

You asked whether a lien could be registered by a pilot for lost wages (rather than a mechanic for lost labour/parts); just searching the above list for "John", I found at least one pilot who has two liens (against seperate companies) for lost wages: #1 #2

Another lien (PDF unavailable) lists its nature of the claim as "Salary owed".

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    $\begingroup$ The problem with liens is that they only really matter when the plane is sold. If the owner has no intention of selling (and many plane owners keep their planes for decades, often dying while still owning it), the lien is worthless. $\endgroup$ – abelenky Jan 26 '14 at 1:44
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    $\begingroup$ @abelenky As mentioned in the quote, bringing forward foreclosure proceedings would force a sale. Whether the salary owed would be high enough to allow a foreclosure, I don't know. $\endgroup$ – Danny Beckett Jan 26 '14 at 6:46
  • $\begingroup$ @abelenky: If a plane owner dies with an outstanding lien on their aircraft, would that have implications for inheritance purposes? $\endgroup$ – Sean Jul 5 '18 at 23:17
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It depends on your state laws for what is permitted for filing a Mechanics Lien. For example in California you cannot hold the persons property. In Texas, you can both hold the property and then sell it at auction if they don't pay up.

If you would like to file a Mechanics lien, the cost is $45 dollars and can be processed through www.planefax.com which operates directly within the FAA's documents room in Oklahoma City. Plane Fax can also further advise if you have a valid lien or not. The process is called perfecting a lien.

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There are two avenues available to mechanics (but not pilots).

1) Apply a mechanic's lien. As pointed out by Danny Beckett and Jason many States allow the property to be held until payment is made. The exact authority and privileges vary State by State.

2) All shops I worked for had strict instructions for the mechanics to not sign the logbook until payment is made. This keeps the aircraft un-airworthy until payment is made.

A pilot does not have either of the above two options, their only recourse is the court system.

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