LEGAL EASE Continued from page 80 PRIORITY When there is more than one lien, which lien takes precedence over other liens? There are a number of rules that apply in these matters, and the rules of precedence can be affected by both federal and state law. State laws on when liens become effective differ. Some states say a lien is effective when it is filed with the FAA, while others say the lien is effective from the date the work commences. Thus, the statement Honeywell BENDIX/KING of the state’s law on when the lien became effective will be important to determining priority. Because state laws are used to determine priority, it is usually a good idea to comply with all of the requirements of state law. If state law says the lien is not enforceable, then a properly filed but otherwise unenforceable lien may be useless to the filer. This is a complicated area of the law because with respect to filing, the courts have made it clear that federal filing of the lien with the FAA pre-empts certain state filing laws. But the courts have made it equally clear that state law controls with respect to prima facie validity of the lien. The general rule is that an unrecorded lien or other encumbrance on an airplane is normally trumped by a recorded interest – this is a rule that has been recognized by the federal courts. There generally is an exception in cases where the holder of the recorded interest had “actual notice” of the prior unrecorded conveyance. Among a set of competing recorded interests, the rule is usually “first-in-time, first-in-right.” So an earlier lien will generally take precedence over a later one. This is ROCKWELL COLLINS .... and many more OEMÕs TPU 67A DU 870 RM 850/855 ÒChange your headingÓ Call 866.524.3777 or 816.524. 7777 Fax 816.554.0042 82 avionics news • june 2013 www.avionics411.comhttp://www.avionics411.com http://www.avionics411.com