Mechanic’s Lien & Storage Lien Laws Explained

Are you looking to file a mechanic’s lien or storage lien? An abandoned vehicle can be troublesome for auto repair shops and storage facilities. Not only are they often left with an unpaid bill from the customer, but they’re also often left with the loss of a vehicle. It can be frustrating and seemingly impossible to track down the owner of an abandoned vehicle; 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.

What is a mechanic’s lien?

A mechanic’s lien is a legal process that allows licensed automotive facilities to recover costs for repairing a vehicle. An individual who is not a licensed automotive facility or similar entity cannot file for a mechanic’s lien. The mechanic’s lien process is complex and should only be used when absolutely necessary; it is not an easy way to title the vehicle. If you are an authorized entity and need to file a mechanic’s lien, your first step should be to check your state’s timeline of activities that must be completed in order to correctly file the lien.

For example, Texas mechanics or repair shops have only a thirty-day window from when the charge first accrues to file mechanic’s lien paperwork. On or after 31 days, the shop can hold a sale or auction of the vehicle. If all of the proper paperwork has not been submitted within that time period, the mechanic’s lien may be invalid.

Besides its mentioned time constraints, a mechanic’s lien that is not done properly 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. States’ Departments of Motor Vehicles 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 against the shop 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 Department of Motor Vehicles is working to make the process for disputing bogus mechanic’s liens more streamlined for vehicle owners. Mechanics should ensure that the mechanic’s lien process is absolutely necessary for each situation. Always attempt to contact the vehicle owner or prior owner before taking further action and be sure that you are familiar with your state’s timeline for mechanic’s liens.

What is a 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 has 30 days from when the lien arose (when the registered owner was billed) to file a lien on that vehicle. Therefore, if they do not meet that filing deadline, they will not be eligible to file a lien on that vehicle.

The laws governing abandoned vehicles vary from state to state. Any licensed automotive repair facility or storage facility in possession of an abandoned vehicle may be eligible to file a mechanic’s lien or storage lien; however, the procedures for doing so can be tricky and are subject to strict timelines and requirements. If you are a licensed automotive repair facility or storage facility looking for assistance in filing a mechanic’s lien, learn more about our process and how we can help here. Don’t let someone else’s abandoned vehicle remain your problem.