Category: Title Problems

Should You File A Lien or An Abandoned Vehicle?

How to File for a Mechanic’s Lien on an Abandoned Vehicle
Well, first of all, it’s very important to distinguish between a mechanic’s lien and an abandoned vehicle, because abandoned vehicles have a lot of limitations on what you can do. In most cases, the vehicle that you’re trying to get a title for really is not abandoned. Because if you call it abandoned, you’re probably going to lose out on what you’re trying to do with your title.

Example from Maryland
We’ll talk about that as an example. We’re going to take a look at a specific state—happens to be Maryland—and how they address mechanic’s liens and how you get titles and what you can and can’t do. Remember, we do have a service where if you want assistance with this mechanic’s lien vehicle title process, you can access that on our website. And we can give you more information either as instructions, or we could do it for you, or we can even do consultation.

Maryland Department of Transportation Motor Vehicle Administration
First, we’re going to look at Maryland Department of Transportation Motor Vehicle Administration’s process for entitling a vehicle with a mechanic’s lien.

Federal Guidelines for Mechanic’s Liens
Remember, this is just one state, but most states have about the same rules. And the reason we selected this one to give you as an example, even if you’re not in Maryland—the chances of you being in Maryland are very slim because it’s the smallest state in the country and there are 50 states, so you’re probably not in Maryland—but the rules here are probably very similar or the same as your state. Why is that? Most states use the federal guidelines for mechanic’s liens and abandoned vehicles.

What is a Mechanic’s Lien?
So what is a mechanic’s lien? You can put it against a vehicle by a repair or storage facility if the owner fails to pay the repair bill and leaves the vehicle in the custody of the facility. Now, think about that. This is not abandoned. They intentionally gave it to you in your custody for an extended period of time.

Selling the Vehicle
After taking the action required to establish a lien, the facility can then sell the vehicle to recoup the money owed to you. That sounds like what you want to do. Don’t be scared by what it says here about selling the vehicle at a public auction. It’s not like you have to bring it to some auction and let them auction it off. You hold the vehicle on your premises. You just give the public notice that they can come offer you a bid. You don’t have to take their bids. You could put your own bid in and beat everybody. It’s not like you have to pay anybody money. The money’s going right to you. You just have to at least let the public offer you something for it.

Rules for Obtaining a Mechanic’s Lien
What are the rules for obtaining a mechanic’s lien? Remember, this is a brief overview, but it does give you some insight into how it works. All of the following must be true before you can establish a mechanic’s lien. Notice the first word “all.” You have to have all of these true.

Charges and Repair Authorization
Charges for the vehicle or vehicle repairs must go unpaid for at least 30 days. Meaning that you can’t just jump the gun and file it 2 days after the guy dropped off the car. You have to wait a month. Charges must be supported by a repair authorization. What does that mean? You have to have a completed repair order authorized by the vehicle owner, including a detailed description of the work performed. So you can’t just make stuff up. You have to have it in writing and the owner has to sign it before you do the work.

Other Options
If you don’t have that or don’t meet any of these other criteria, there are other ways you can get a title. Our website will give you what’s called a civil lien or a court order title or a bonded title. There are other things you can do. So if you don’t meet these criteria, don’t worry. You can do other things. And sometimes the other things are actually easier.

Storage Fees
If you want to charge storage fees, you have to have a storage contract. You can’t just make up storage fees out of the blue and say “I’m charging you $20 a day.” Can’t do it. You have to have it in writing and signed.

Abandoned Vehicles
A vehicle that has been abandoned does not qualify for a mechanic’s lien. So don’t start calling these vehicles abandoned.

Contacting the Police
What happens if the vehicle’s abandoned? The local police department should be contacted.

Steps to Establish a Mechanic’s Lien
How do I establish a mechanic’s lien? At least 10 days prior to the planned auction date, you have to send a notification letter by registered mail to all the persons listed below.

Notification Details
The owner of the vehicle. The person who left the vehicle if it’s different than the owner. So if the vehicle’s owned by Joe Smith and Sally Smith dropped it off, you have to send a letter to each of those people.

Security Interest Holders
You have to send a letter to all holders of a security interest. What does that mean? That means lienholders. So if the vehicle has a lienholder, you have to send them a notice. And you have to send a notice to basically the DMV, the government authority.

Content of the Notification Letter
What has to be in that letter? The VIN number, year and make. A list of all the charges owed to you. So you have to have a breakdown of what the fees are that you’re claiming. Letting people know it’s going to be auctioned and the date and time of that auction.

Newspaper Advertisement
What you also have to do is you must also place a notice in the newspaper. And it’s very specific how you have to do it.

Correcting Errors in Advertisement
If the newspaper advertisement is incorrect, meaning you don’t wait the number of days, you do it too soon, too late, you must re-advertise and again send the certified letters out again.

Auction and Title
Then you hold your auction and you get your title.

Downsides and Limitations
What are the downsides? The downsides are, first of all, if you’re not a licensed repair facility, you can’t do this. You can’t just fix cars in your backyard and do a mechanic’s lien because you’re an illegal mechanic to begin with. You can’t make up storage fees out of the blue. You also can’t wait too long. Most states have a rule that says you have to do this within six or eight or ten months. If you’ve been sitting on a car for 10 years, you can’t do a mechanic’s lien.

Alternative Titles
Most of the time if you’ve been sitting on a car more than two or three years, you’re out of luck for a mechanic’s lien. But there are other things you could do that still get you a title. And a lot of times those other things are better than a mechanic’s lien. Like a civil lien or court order title or bonded title or VT transfer.

Importance of Legitimacy
A mechanic’s lien is a powerful tool to get a title for a vehicle that has other problems. However, don’t do a fake mechanic’s lien if a person really did not bring their car in for repairs. You don’t have a signed repair order. Don’t start making stuff up because what’ll happen is that the owner of the vehicle after you get your title is going to get a letter saying “Hey, we noticed that your vehicle was transferred away from you using a mechanic’s lien.”

Consequences of Fraud
Did you sign a repair order? Did you bring your car in for work? They’re going to audit the mechanic’s lien. If they find out that you filed a fake mechanic’s lien, they’re going to revoke your title and they’re going to do enforcement action against you. You may not think it’s a big deal but the state licensing authority—they do know that people use this improperly to get titles when they’re not supposed to.

Consultation and Assistance
So make sure you’re doing it the right way. Make sure you’re all legit, i’s dotted, t’s crossed. If there’s any question that the mechanic’s lien might not be the way to go, then do a civil lien. Do a court order title. Do a bonded title. It’s way better in terms of how it works out for you. If you do have more questions about how to run one of these, how to do the paperwork, or you just want us to do it for you, click the link below.

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Overlooked Problems With Vehicle Titles

Parking Violations and Tow Impoundments
So you parked in the wrong place, you left your car blocking a fire hydrant, maybe you didn’t read the sign that says no parking is allowed in this parking lot, and your car got towed. No big deal, right? You just go down, pay a fine, and get your car back. Well, you have to be very careful because, in many states, you are required to prove ownership of the vehicle before it can be released to you. If you do not have your car title, your car could stay impounded and could be sold very quickly.

Risk of Losing Your Car
Drivers risk losing cars forever under state laws that allow towed vehicles to be sold days after they’re impounded within a 15-day time scale. Some states and municipalities have a rule that says if the car is not picked up and paid for within a week or two, sometimes a month, they can auction off your car and sell it. You lose your car, and the paperwork requirements to get your car out might be something you can’t do quickly, which is why it’s very important to always keep track of where your car title is located.

Importance of Regularly Checking Your Car Title
Check it every year at least, maybe every six months. Is it in your file cabinet? Is it in a safe deposit box? Is it in an envelope? Here’s the reason why: your vehicle registration, you renew every year. Every year you get something in the mail saying your registration is expired. Pay the fee, show your insurance, and you get a new registration and a sticker for your license plate. Good to go. So, it’s a regular reminder. A vehicle title doesn’t have to be renewed. It’s a document that is printed and issued to you one time when you buy the car, and that’s it. If you lose it, you may not know about it until you need it for something, and if the reason you need it is because your car is going to be sold in a week, it might take you longer than a week to get your title. So, always make sure you know where it is.

Issues with Not Transferring the Car Title
Also, very, very important: if you’ve purchased a vehicle and never transferred the title to your name—let’s say you bought a car on Craigslist, the person signed the back of the title, they gave it to you, and you never put it in your name, you just left the title signed to you in the drawer—that’s even worse because you can’t get another title.

Getting a Duplicate Title When It’s Not in Your Name
You can’t request a duplicate because it’s not in your name. So, even though you might be saying, “Well, I don’t want to pay the fees, it’s no big deal,” if you have a car, make sure you get that title in your name as soon as you can. If you lose it or it gets damaged, or you spill coffee on it, you’re going to have a problem, especially if the car gets towed or is in an accident. Sometimes people crash their car, and the insurance company needs the title to pay your claim. If you don’t have it, you could be out of luck. So, checking your title on a regular basis is a good thing. If you’ve lost it, get a duplicate.

The Process After Paying Off a Loan on Your Car
Here’s the other thing: if you have a loan on the vehicle and you pay off that loan—you buy a car at a dealership, you have a 48-month loan, you pay your payments, you pay your last payment, send it in—what happens to the title from the lender, from the bank? They take the title that they have (because banks hold your title while you have a loan). You pay your last payment, they take that title out of their file cabinet, they sign it, stamp it “paid,” and they mail it to you. You think, “Well, I have my title,” but you really don’t because that loan, that lien on the title, that cloud on title is still registered at the DMV, at the state title office. The only evidence that it’s been paid is what is signed on that title. The banks normally don’t notify the government that you paid off your loan; they just tell you.

Handling a Lien on the Title
Now, if you lose that title, you have to go to the government, the DMV, Department of Transportation, or whatever agency in your state issues titles. Then you tell them, “Hey, I need to get a replacement title.” They pull it up on the screen: “No, you have a loan on your car.” Now, you have to go back and chase it down. Maybe the lender’s out of business, maybe they moved, maybe they just don’t have a department that can help you. Now you’re stuck. So, as soon as you get that title with that lien signed off, take it to DMV, have them remove that lien from your title record so you don’t have to worry about a duplicate title in the future. A vehicle title is a very important legal document. Make sure you have it properly recorded in your name, make sure the liens are removed, and make sure you know where it is at all times in case you need it at a moment’s notice.

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