Brian,
The title company will not investigate to see if a lien is still valid - so long as it is still registered with the FAA and has not been removed, it is considered to be still valid. Further investigation costs a lot of money and requires massive homework.
As one who has chased down very old liens and tried to get the holder (who may be several steps removed from the original because of banks going under and others buying up the assets) to drop the lien, it's a gigantic pain in the whatis. In many cases the current lien holder is somewhat removed from the original lender and when the current lien holder learns of the lien (which it often had no idea even existed), it thinks it's got a source of income and starts taking action to collect the money. It becomes a huge mess.
As someone who has dealt with such a situation - there are two comments on the subject - first, it's a buyer's market so you don't need to get involved with such a headache as there are lots and lots of other airplanes out there, and, second, to put the first comment bluntly: Run away!!! Run away fast. You do not want to deal with a lien that is over half the value of an airplane.
Airplanes with outstanding liens on them should, IMHO, be considered to be the same as airplanes that have major damage history that is not shown in the logbooks, an oil filter full of metal that is so large that pieces have serial numbers on them and a borescope inspection that shows all of the valves either warped or burnt.
But, what do I know?
Warmest regards,
Rick
