Where the legal owner of an aircraft does not meet the definition of a U.S. citizen for purposes of registering an aircraft with the Federal Aviation Administration, an aircraft can be registered in the U.S. law by utilizing a non-citizen trust. In a non-citizen trust, legal title to an aircraft is transferred in trust to an entity that qualifies as a U.S. citizen (often called Owner Trustees). The Owner Trustee registers the aircraft with the Federal Aviation Administration in its name and acts as a trustee for the non-citizen beneficiaries of the trust. The trust relationship is created and governed by a trust agreement between the Owner Trustee and the non-citizen beneficial owner of the trust, which is filed with the Federal Aviation Administration. An aircraft operating lease agreement between the Owner Trustee and a third-party operator of the aircraft is often executed.
Information Contained on the Canadian Aircraft Registry
Once registered in Canada, the Canadian Aircraft Registry database makes public all current and historical aircraft registration information. This includes the aircraft’s registration mark, common name, model name, serial number, registered owner, and date of registration. However, this registry provides no information on the legal owner of the aircraft or the existence of any liens. In Canada, the registration of security interests takes place under applicable provincial legislation. Generally, searches are conducted only in the province in which the registered owner’s corporation is formed or maintains its head office in. However, depending on the use of the aircraft, hangar location, etc., further searches may also be advisable. It is therefore essential to consult both the International Registry of Mobile Assets, as well as the security registry in the applicable province(s) to determine the status of title to the aircraft in question.
In contrast, under the U.S. system, perfection of security interests in aircraft typically requires that such interests be recorded with the Federal Aviation Administration’s Aircraft Registry. Furthermore, other holders of liens arising under state law that apply to an aircraft registered with the Federal Aviation Administration may record notices of the existence of such liens with the Federal Aviation Administration’s Aircraft Registry. These recorded documents are searchable public records.