Under recently adopted rules, all current FAA aircraft registrations will expire between March 31, 2011 and December 31, 2013, and each new aircraft registration issued on or after October 1, 2010 will have a term of three years and will include a stated expiration date. Prior to the adoption of these rules, an aircraft registration was effective until the aircraft was either sold, deregistered or otherwise disposed of.
According to the FAA, approximately one-third of the 357,000 registered aircraft have inaccurate records – because of failure to report changes in aircraft ownership, address changes and destruction. This level of inaccuracy raised safety and law enforcement concerns. In response, the current registration system has been abolished and replaced with a three-year term renewal program. The rules - entitled “Re-Registration and Renewal of Aircraft Registration” - were published in the Federal Register at 75 Fed. Reg. 41,968 and become effective October 1, 2010.
Owners of FAA registered aircraft are responsible for re-registration and renewal, but others, including operators, lessors and financiers of FAA-registered aircraft are also affected. As noted below, all affected parties need to be aware of these new rules, and in particular the deadlines imposed under the new rules. The consequences of non-compliance could include the grounding of the owner’s aircraft and the need to affix a new N-number to the aircraft.
Expiration of Current Registrations and New Registrations
Under the new rules, all FAA aircraft registrations issued prior to October 1, 2010 will expire, and re-registration must occur during the applicable filing window, in accordance with the following schedule:
FAA aircraft registrations issued on or after October 1, 2010 must be renewed prior to the expiration date stated on the certificate of registration. No registration will be valid for longer than three years. Renewals must be filed during a filing window that begins five months prior to the registration expiration date.
Re-Registration and Renewal Process; Failure to Re-Register or Renew
The new FAA rules place the responsibility for re-registration and renewal of U.S.-registered aircraft upon registered owners. Each registered owner should be careful to complete re-registration or renewal within the applicable filing window.
The process will be kicked-off approximately 6 months before the applicable registration expiration date by a notice from the FAA registry to the registered owner. The notice will be sent to the address for the registered owner shown in the FAA registry’s records. The notice will contain instructions for online re-registration or renewal, and will also contain a passcode to log into the FAA’s website. The passcode will be unique to that aircraft. When the user logs in, it will be asked to confirm the existing registration information in the FAA’s records. If that information is correct, the user may simply click on the website to confirm, and will be required to pay a $5.00 fee. If the FAA’s information is incorrect, the user will be directed to a blank re-registration/renewal form (AC Form 8050-1A for re-registration and AC Form 8050-1B for renewal) that the user must complete (with the correct information), print out and mail to the FAA registry, along with a check for re-registration/renewal fee.
If the owner has not re-registered or renewed by the 60th day prior to the registration expiration date, the FAA will send out a second notice to the registered owner. At that point, the passcode permitting on-line re-registration and renewal will expire. The owner may still re-register or renew, but must submit a paper application.
If the owner does not re-register or renew by the registration expiration date, the aircraft’s registration will expire. At that point the aircraft will be without authority to operate. Existing insurance coverage will likely lapse. The owner may re-register the aircraft using a new AC Form 8050-1 Aircraft Registration Application. The FAA will process the owner’s Application – but that could take weeks. In the meantime, the aircraft must remain grounded. Under FAA rules, the aircraft may not be operated under the pink copy of the Aircraft Registration Application (as it can be when title is transferred). Following the expiration of registration, assuming the owner fails to reinstate its registration, the existing N-number for the aircraft may eventually be cancelled.
Failure to re-register or renew may complicate the registered owner’s life in other respects too. It may cause a default under any lease or finance agreement involving the aircraft. In addition, it may call into question whether previously-filed security agreements continue to “perfect” the security interests of lenders. According to the FAA, in its explanation of the new rules, security interests registered with the International Registry (Cape Town) will not be affected by failure to re-register or renew with the FAA because Cape Town registrations are not dependent on continuing aircraft registration with the FAA. However, assuming that to be the case, how the failure to re-register or renew will affect pre-Cape Town security interests in aircraft is not completely clear. Given this uncertainty, lenders should monitor the re-registration and renewal deadlines for all their financed aircraft, whether or not their interest is registered under Cape Town. Note that the FAA will not send any of the above re-registration or renewal notices to a lender or lessee. These notices are sent to registered owners only.
In light of the new rules, owners of U.S. registered aircraft should:
1.Check that the owner’s name and address on file with the FAA registry is current and accurate – and do that now! If corrections need to be made, they should be submitted as soon as possible. If the address on file with the FAA is incorrect, the owner will not receive these notices, won’t receive its passcode for web access and may fail to complete the re-registration and renewal process by the applicable deadline. Please see the FAA registry’s re-registration web page for further information.
2.To avoid unpleasantness, re-registration or renewal should be effected during the online filing window. The online filing window will last for only three months – the fifth, fourth and third months prior to registration expiration. Re-registration and renewal should be completed during the online filing window to avoid having the current certificate expire prior to issuance of the new certificate. The FAA will send two registration expiration notices to the registered owner. Re-registration or renewal applications submitted after the second FAA notice (at 60 days prior to expiration) will be processed, but a new registration certificate may not be issued until after the expiration of the current registration. If that happens, the aircraft may not be operated until the FAA issues a new certificate – leaving the aircraft owner subject to the FAA’s schedule. The rules do not permit temporary operation through the use of the “Pink Copy” registration certificate.
3.Operators, lessees and lenders need to be proactive too. Owners of FAA registered aircraft are responsible for re-registration and renewal, but operators, lessees and lenders may be affected too. Operators, lessees and lenders, not just registered owners, need to be proactive about - and should monitor - the re-registration and renewal process.