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Beginner’s Guide to Mechanic’s Liens, Storage Liens & Abandoned Vehicles

Abandoned vehicles are a serious problem for automotive repair shops and storage facilities. Not only are they often left with the unclaimed or abandoned vehicle, but they’re also often left with a hefty unpaid bill from the customer. It can be frustrating and seemingly impossible to track down the vehicle owner to pay their invoice; so what can be done? If you’re a licensed automotive repair shop or a storage facility, you may be eligible to file for a mechanic’s lien or storage lien to recover the costs. 

Mechanic’s lien

A mechanic’s lien is a process afforded to licensed automotive facilities in order to recover costs for repairing a vehicle. Individuals who are not a licensed automotive facility or similar entity can not file for a mechanic’s lien. The mechanic’s lien process is a tedious legal process that should only be used if absolutely necessary as it’s not an easy way to title a vehicle. If you’re an authorized entity and you need to file a mechanic’s lien, the first thing you need to do is to check your timeline. Every state has a different timeline of activities that must be completed to correctly file a mechanic’s lien.

For example, when filing a mechanic’s lien in Texas, the mechanic or repair shop only has a 30-day window from when the charge first accrued to file. Then on or after the 31st day, the shop can hold a public sale or auto auction. If all of the proper documents have not been submitted within that time frame, the mechanic’s lien may be invalid.

In addition to a potentially strict timeline, mechanic’s liens that are done improperly can bring financial penalties to the mechanic or repair shop. For many years, mechanics and auto repair shops will sometimes abuse the mechanic’s lien filing system by overbilling for work done in order to take ownership of a vehicle. DMVs across the country are going out of their way to crack down on bogus and wrongful mechanic’s liens. For example in Oregon, HB4087 states that if liens are not placed properly, the vehicle owner can bring an action to recover without demand $2,000 or an amount equivalent to twice the value of the vehicle plus the owner’s reasonable cost up to $20,000. Similarly in Texas, vehicle owners can bring action against a shop and recover up to $10,000 if a lien is improperly placed on their vehicle.

The DMV is working to make it easier for vehicle owners to fight mechanic’s liens. If you’re a licensed mechanic, be sure that the mechanic’s lien process is absolutely necessary for the situation. Always attempt to contact the vehicle owner or prior owner before taking further action and make sure you’re aware of the timeline in your state.

Storage lien

A storage lien is a process afforded to an automotive storage facility or similar entity in order to recover costs of vehicle storage or disposal. Similar to mechanic’s liens, not all parties are eligible to file a storage lien. A storage facility or similar entity is one that is involved with storing, repairing, or otherwise caring for automotive vehicles. Each state has its own process to file a storage lien and the timeline varies depending on the geographic location. 

For example in California, if a vehicle is valued at $4,001 or more at a storage or self-service storage facility, the storage company only has 30 days from when the lien arose (aka when the registered owner was billed). Therefore, if they fail to file within that 30 day period, they will not be eligible to file a lien on that vehicle.

Abandoned vehicles

Abandoned vehicles are vehicles that are completely abandoned by their registered owner with no intention to collect the vehicle and/or the prior owner is unable to be identified through DMV records or other official records. Most abandoned vehicles aren’t necessarily a “finders keepers” type of situation. Typically most states require that at the end of an abandoned vehicle process, the vehicle must be disposed of rather than titled with a new owner. The abandoned vehicle process is not designed for purchasing and titling junk vehicles.

Not every abandoned vehicle will qualify as such, but just about anyone can file an abandoned vehicle if they are able to meet their state’s abandoned vehicle requirements. If you’re an individual who has an abandoned vehicle on private property, check your state’s abandoned vehicle laws to see if your situation qualifies. 

For example, in Indiana, to request a junk vehicle without a certificate of title, you must have attempted to contact the prior owner with a certified letter. After contacting the prior owner, the applicant must provide proof of lien release if applicable, complete abandoned motor vehicle forms, and state how the vehicle came into your possession. If the vehicle is determined to be abandoned after these documents are submitted, the applicant must then dispose of the vehicle.

These methods of title recovery are tedious, time-consuming, and can be challenging to navigate. Before pursuing one of these methods, determine if your situation calls for it and check your state’s timeline. Many times vehicles are able to be titled using a different method such as a bonded title. If you’re looking to file a mechanic’s lien, storage lien, or abandoned vehicle, may be able to help. Get in touch with us today at [email protected] and learn more about how we can help you file.

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