The Challenge of Obtaining a Mechanic’s Lien Title for a Vehicle So why is it so hard to get a mechanic’s lien title for a vehicle, and why is it not always the best way to try to get a title? For many years, repair shops, garages, and towing companies have used the mechanic’s lien or towing lien process to get titles for vehicles. A lot of times, they thought vehicles were abandoned and wanted to get a title. They even sometimes took payments from outside parties to go through a fake mechanic’s lien process to get a title. A lot of times, people with title problems will ask, “Can I just put a mechanic’s lien on the vehicle?” or “I’ll just file for an abandoned mechanic’s lien.”
The Purpose of Mechanic’s Lien: A Payment Protection for Repair Shops Here’s the problem: the mechanic’s lien process is a privilege provided to licensed automotive repair shops in order to get paid for work when a customer fails to pay the bill. So, if someone brings in a car to get fixed, then decides they don’t want to pay, the mechanic’s lien is designed to help the repair shop get compensated for their work. However, that privilege is frequently abused—or maybe “expanded” is a better word—to try to get mechanic shops titles for vehicles under questionable circumstances.
Government Response: Tightening the Mechanic’s Lien Process What the government has done, and what different state DMVs have done, is make the process very, very difficult. It’s harder than any other process, such as getting a bonded title or a court-ordered title, because they want to ensure that if a repair shop is using the mechanic’s lien, it’s for legitimate reasons.
Common Cases of Mechanic’s Lien Fraud A very common case of fraud involves repair shop owners engaging in title fraud. This fraud often involves creating fake work orders and records, claiming to be filing a mechanic’s lien, and then using the process to get titles for vehicles that may have been bought at an auction without a title, purchased through Craigslist, or have a lien they want to remove.
Government Oversight and AI Monitoring The government scrutinizes each mechanic’s lien application and audits them. They also use AI and algorithms to monitor shops filing a high number of mechanic’s liens. The government checks the shop’s payroll and sales tax records to estimate the shop’s business volume. For example, if a shop with only one or two employees files more mechanic’s liens than usual, it raises red flags.
Legal Consequences of Filing a Fraudulent Mechanic’s Lien If caught, repair shops involved in title fraud could face severe penalties, including prison terms of up to 20 years and restitution to repay any fraudulent profits. For example, in a recent case, shop owners were charged with creating fake repair orders and selling vehicles illegally, resulting in charges for title fraud.
Mechanic’s Lien: Powerful but Heavily Scrutinized A mechanic’s lien is a powerful tool, but because it’s often misused, it is scrutinized more than any other type of paperwork. If you’re considering using a mechanic’s lien to get a title, it should only be used when someone has brought a car to a shop for repairs, has signed a repair order, and then hasn’t paid.
Alternative Title Methods If you have a vehicle that needs a title and are considering a mechanic’s lien, there are other methods that might work better. Options like a court-ordered title, bonded title, or other procedures are often easier to execute and less scrutinized than a mechanic’s lien. These methods can be found on our website.
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Title Caution and Potential ConsequencesThis is why you want to be very, very careful about how you get your car title. If you use a, um, sketchy or illegal method, it could come back and bite you. Here’s a story about a DMV clerk that was selling illegal titles through a DMV scam that she was running, where she had people that were selling these titles to people that didn’t have the right paperwork, and she was making 800 bucks per title. Overall, it was $3 million worth of titles that were processed. This was an auto tag agency in Miami, and there was a stolen vehicle that had, um, lowjack on it, and they found it in a body shop. But they found that there was a title for it—somebody had issued a title for that vehicle. But they tracked it back and they found that this title clerk allegedly had issued the title, and they found a lot of her records for vehicles were for fraudulent titles, and she was making a lot of money.
Consultation Services ReminderIn the meantime, remember you have access to live one-on-one consultation, undivided attention of a licensed certified expert in this subject and many others. We want to listen to your story, we want to hear your questions, and give you expert advisement of your options. We want to tell you what we know about your situation and what options you have. Now back to reading.
Legitimate Title Acquisition AdviceSo anytime you’re looking to get a title for a vehicle, you want to make sure you’re doing it legitimately. You’re not using any kind of fake mechanic’s lien, you’re not doing any kind of tax evasion, you’re not paying somebody to do something illegal because all the titles for these vehicles are getting revoked. So whoever had the title is losing out, and if you were in on the scam, they’re looking at other prosecutions. So make sure that you’re getting your title legitimately.
Importance of Proper DocumentationRemember, a title is a legal government document. You can’t buy one from a company; you can’t download one from the internet. You have to get it from the government. Yeah, they’re going to make you jump through a few hoops, but they do that to protect you as the owner. Because once they give you a title, you don’t want anybody to take it away from you. So, the same way that you have to provide a lot of documentation to get a title, that means no one can get it from you later without the same kind of documentation.
Avoiding Scammers and Ensuring LegitimacySo get your title the right way—do it legitimately. Use the legitimate source. Don’t pay any of these fly-by-night or scammers that are out there trying to sell you titles using some kind of, you know, dubious means. Make sure that whoever is getting a title for you can explain in detail how they’re going to do it, so you know it’s not being done illegally.
So many of you have asked how exactly are we working on getting vehicle titles easier to get so they’re not, you know, paper documents old school and they’re more electronic. Well, as part of the eART Coalition, we are working state by state tirelessly to get states to get electronic titles. And here’s an example of how that works. This is a directive we’re working on with the state of Massachusetts, and here’s all the gatekeepers and the stakeholders that are working on this. Here’s us right here, car titles, you see.
Stakeholders InvolvedAnd you also have ADESA, one of the largest auto auctions. You have TRAR, which is a major automotive company. You have Copart, which is a salvage auction. A lot of major players in the automotive and document industry, and we put together a project with each state based on what their rules are. This particular inquiry went directly to the lieutenant governor of Massachusetts, and it says under signatories, we would like to request your support in directing the registry of motor vehicles.
The Role of RMVThe RMV, that’s what they call it in Massachusetts, the registry, not the department, to adopt necessary rules or policies to facilitate the acceptance of electronic signatures on all documents required to complete motor vehicle title transactions. It’s real simple. And then we put the supporting information, we put all the different benefits.
State-Specific Title ProcessesIt’s tedious because we have to do it one state at a time. It’s not like there’s a national title system; every state has a separate vehicle title process. So this is how we do it: we go through the state’s rules and regulations, find out who handles it, put together a package for them, and also offer support.
Third-Party InvolvementAs they’re doing this, they might need programming, they might need knowledge of other states, they might need information from third-party vendors like the companies you see on this list. All of those companies are involved with the title process, and the states want to make sure that third-party vendors are also part of the solution. So each of us are committed as a company to providing support for the state to be able to do this but also to make it easy for them to do it so that there’s no friction in this changeover.
Success in the WorksSo this is how we’re working on it. It’s happening behind the scenes. It may take a few years to have this all done, but we’re doing it one state at a time. It’s been very successful. As you probably remember from previous reading, the state of California put a lot of their titles on the blockchain, which is a great start. And other states are doing the same thing. We will not stop until we make it easier for consumers to get titles for vehicles because we know how hard it is.
The Goal for ConsumersWe know what kind of problems you have getting titles for vehicles. At the moment, we try to make it easier by being able to do the paperwork for you if you want, but in the long run, we want to make it easier for everybody so you don’t need to have that kind of professional assistance just to get a title for a car. Because if it’s your car, you’re supposed to have a title.
Digitized Car TitlesWe’ve covered this in some other videos before, but our membership and participation in eart, which is a coalition of major companies trying to get car titles to be digitized, along with companies like DocuSign, CarMax, and Carvana, is starting to pay off. Look at this news story—California DMV has put 42 million car titles on the blockchain. They’ve digitized vehicle titles. This is a great development and all part of the push to make vehicle titling more modern, where you don’t have to worry about paperwork, documents, and signing forms.
California Leads the WayThis is huge progress, and California, being the largest state in population, will lead the rest of the country. So, what does this mean for people with titles? By digitizing 42 million titles using blockchain technology, first of all, it’s going to prevent fraud. Most importantly, it will smooth the car title process, so it’s not going to be quite as bureaucratic. It’s not going to be quite as much of a nightmare to deal with the DMV.
The Convenience of Digital TitlesYou’ll be able to get vehicle titles through a mobile app. Think about that—think about what you have to go through now to get a vehicle title. How much paperwork, hassle, and runaround do you have to deal with? How great would it be just to do it with an app?
Lean Releases and TransparencyThe other part is going to be lean releases. First of all, it’ll block lean fraud, but it’ll also provide a transparent record of property ownership. When you pay off your car or pay off your lean, you won’t have to go chasing that lean holder to release your lean because it’ll be something you download on your phone. Your lean release is already right there.
Timeline and Opt-Out OptionIt may take a little bit of time. They say that you’ll be able to access your digital car title starting early next year, so less than 12 months. It’ll also be something that you can opt out of. If you don’t want to have your title on your phone, you can still go paper if you want to.
Inquiry about Titles for Abandoned VehiclesOne of the most common questions that our sales staff gets on phone calls has to do with people inquiring about how to get a title for an abandoned vehicle. I have an abandoned vehicle I need to get a title for. Now many of these calls the vehicle is really not abandoned. It’s something that they bought on Craigslist or Facebook and they’re just thinking that if they call it abandoned they can get a title for it.
Definition of Abandoned VehiclesIt’s very important to understand what the word abandoned means. An abandoned vehicle is a vehicle that literally has been abandoned and has been not claimed and discarded by the owner. The problem with that is in most states that does not allow the person who finds it to keep it. It’s not like Finders Keepers.
Oregon State Law on Abandoned VehiclesWe’re going to take a look at a particular set of laws. This happens to be from the state of Oregon, but most states have exactly the same law, so it’s very important to look at the wording of how abandon works. Be aware that even though an abandoned vehicle is not a way to get a title, there are many other great ways to get a title. But first, we’re going to look at abandon to see what it means for your scenario. So let’s dive in deep and look in detail at how this works.
Packet Information on Abandoned VehiclesSo this is the packet. It says right here the packet contains information about some situations where ownership of a vehicle may be transferable through a possessory lien. Separate from that, a separate bullet point says information on abandoned vehicles. So let’s jump down to the abandoned vehicle part first and then we’ll look at the other parts second.
Legal Interest in Abandoned VehiclesHere is very specific language: titling a previously abandoned vehicle. To obtain a title, a person must have acquired a legal interest in the vehicle. In most cases, people do this through some sort of purchase or financial agreement like you bought it from a dealership and they gave you a contract, or you need to go through some form of legal process. It says right here legal process, and you see on our website, court order title is a legal process that you can use to get a title for an abandoned vehicle.
Process for Abandoned Vehicles on Private PropertyKey sentence right here: if you don’t see anything else, one cannot simply attain title because the vehicle was left on one’s property. That right there tells you all you need to know. You can’t simply just magically say I want a title because it was left on my property. You have to go through some form of legal process that’s outside the scope of the DMV and has to go through some other legal authority. We’ll talk about that, but that’s a good starting point to know what you can and can’t do.
Disposal of Abandoned Vehicles by AuthoritiesSo here are the provisions for disposal of abandoned vehicles. For vehicles abandoned on highway public or private property, the law allows for an appropriate authority to remove the vehicle. Authority meaning state, county, or city, so the government removes the vehicle. So that means if you call it abandoned, you have to call the government and tell them to come get it, and they auction it off.
Towing Abandoned Vehicles from Private PropertyYou can also, if a person is the owner of a private property on which a vehicle has been abandoned, you may have a tower tow the vehicle. First, you have to put a note on the vehicle saying if it’s not removed within 72 hours, the vehicle may be removed. Then you have to fill out a form that has the description of the vehicle, location of the property, and you have to submit that to the DMV. Also, the DMV does not provide you with a form. The information needed can be written on a piece of paper. Right, so they don’t give you any blank forms for this.
After the Vehicle is TowedSo what happens after it’s towed away? Well, after it’s towed away, in cases of abandoned vehicles, the DMV must receive satisfactory evidence of the facts applying for the title for an abandoned vehicle sold by an authority. Remember where we talked about the authority will come get the vehicle: state, county, or city.
Applying for a TitleThe purchaser of that from the auction may apply for a title, and the bill of sale must describe the vehicle, identify the statutes under which the sale was held. So you can’t just get a bill of sale from the police and say, “Hey, I bought it, I want a title.” They have to describe under what legal authority that was done. Then to apply for a title, the purchaser must submit an application for title and a certificate of possessory lien forms, the one that covers your situation. Sounds kind of complicated, fully completed, signed by the authorized representative of the business claiming the lien.
Importance of Proper DocumentationApplication will be rejected if you submit one more than one form certifying foreclosure. So this is not a simple matter. You also need to keep records: signed copy of the original tow notification, repair order signed and dated copy of the claim of lien signed, and copy of the DMV certificate of possessory lien.
Misconceptions and Legal RequirementsRemember this doesn’t apply just for any old abandoned vehicle. You have to jump through a bunch of hoops. Here’s some questions that a lot of people ask that the DMV has taken upon themselves to put on this form. Am I required to contact the vehicle owner of the vehicle I’m getting a title for? Depends on the type of lien that’s being foreclosed. If you’re not sure, you may want to get legal advice from an attorney. That’s how complicated it is.
Legal Obligations and PenaltiesYou have to follow all the rules. You have to state under penalty of perjury, “I foreclose the lien in accordance with provisions of ORS 8712 and ORS 176, etc.” If you notice, it says buyer’s name and date of auction required. You can’t just assign it to anybody you want. You have to hold it out for people to bid on it so that the proper amount of money is obtained for the vehicle.
Possessory Lien ProcessRemember this possessory lien is the result of an abandoned vehicle being removed from private property at the request of the owner. It’s not just the owner does this, it’s the towing company or the state does this. In addition, the seller, if you’re not a manufacturer, licensed dealer, or registered tower, you have to get a surety bond of $220,000 in order to file with the DMV for this auction. So it’s not just an automatic thing.
Compliance and PenaltiesYou also have to abide by all the rules. It’s a Class A misdemeanor to misrepresent anything, punishable by jail up to a year or a $6,000 fine. On the last page, it reminds you that foreclosure of a lien is a result of a vehicle being towed at the request of an authority: state police, sheriff, department of transportation. It talks about that it has to be done under a regulatory authority.
Alternative Processes for Obtaining TitlesSo the short answer is, if you call something abandoned, it triggers a whole set of requirements. If you go through another process like a court order title or a bonded title, it’s much simpler. You don’t want to automatically claim abandoned unless literally the car dropped out of nowhere and you don’t know where it came from. Then maybe it might be abandoned, but it also limits your chances of becoming the owner of the vehicle.
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