Drones and Other Aircraft: What Lenders Should Know
Drones are quickly becoming a staple in agriculture – they are used for crop-dusting, surveying land, monitoring crop growth, among other things. Insurance adjusters are also becoming licensed to use drones to help assess damage from storms on cropland, which speeds up the claims process by showing the damage without the need to wait for the damaged areas to become accessible to people. Protecting a lender’s security interest in drones and other aircraft can be tricky, but it is imperative for lenders to become familiar with the process, given their rise in prominence. Read on for a primer about aircraft registration and lien recordation.
Regarding registration: All aircraft that are to be operated must be registered with the Federal Aviation Administration (FAA). The Aircraft Registration Inquiry contains aircraft registration information that can be perused online, or in person in Oklahoma City. Most aircraft are identified by an “N-Number” which is issued by the FAA Civil Aviation Registry when the aircraft is registered with the FAA. The N-Number is most useful when searching for an aircraft that is already registered, but there are several other different search criteria that can be used, like a serial number, or make and model. Note, however, that some unmanned aircraft (also known as drones, to be distinguished from manned aircraft) do not need to obtain an N-Number. In the interim final rule titled “Registration and Marking Requirements for Small Unmanned Aircraft” (Registration IFR), the FAA provided a web-based aircraft registration process for the registration of small unmanned aircraft to facilitate compliance with the statutory requirement that all aircraft register prior to operation.