If a car owner has an overdue bill with the mechanic and has no plan to settle it soon, the mechanic is legally permitted to start a mechanic’s lien process. That is, if the registered owner fails to honor the terms set out in the ongoing client-customer relationship.
How do you put a mechanic’s lien on a car? Read on to find out.
Why File a Lien?
It sometimes happens that a car owner runs out of funds to pay the mechanic for the work done on their car. Let’s admit it, a lot of car owners have experienced this dilemma one time or another.
So if the mechanic is safely keeping the car for another month or two until the owner is ready to come in with the cash to reclaim it, should the owner worry at all? As the car owner should know, the mechanic’s lien is not something to ignore.
The customer needs to sort out any payment issues with the mechanic as soon as possible since the lien, if enforced successfully, comes with huge legal exposure and monetary losses.
In most cases, the initial agreement between the mechanic and the owner does not anticipate payment hurdles. However, they do arise as situations change along the way. That is why underlying motor vehicle regulations allow a mechanic to take legal actions sooner rather than later.
So, no matter how rosy the relationship is between the owner and the mechanic, they should always try to straighten things up immediately and avoid a mechanic’s lien from taking place. The process of obtaining a mechanic’s lien against a car is fairly simplified, and the mechanic gets the upper hand moving forward.
What Is a Mechanic’s Lien on a Car?
A Mechanic’s Lien is a legal process that allows the transfer of special rights from the owner to the mechanic seeking to recover overdue costs for completed works.
The lien, also known as the Garage Keeper’s Lien, offers a reprieve to the mechanics, storekeepers, or haulers, who for some reason suffer the fate of late and disputed payment.
Basically, it’s a protection for the workers. It empowers them with a better bargaining position against the often “reluctant” car owners who take advantage of the situation to avoid responsibility.
What mechanics and car owners should understand is that a mechanic’s lien is very powerful as it is given higher priority than other loans or debts.
What Constitutes a Mechanic’s Lien?
A mechanic’s lien simply means that an aggrieved mechanic can attach the expenses for services done on the car.
Thus, a duly processed lien consists of the following characteristics:
- A proper presentation of charges to the registered owner. This is normally a written statement, and the contents vary depending on legal jurisdictions.
- A court order or an auction sale authorization from the Department of Motor Vehicle (DMV) or other mandated agency responsible for lien registration and enforcement.
- A verifiable notification process (normally certified mail with return receipt), proving that the registered owner was properly notified of the proceedings.
- An acceptable form of documentation demonstrating that the owner was given adequate time to do an independent inspection of the said repairs.
Let’s suppose you are the mechanic and you’ve invoiced your client for the cost of repairs, and they are not complying with your requests. You shouldn’t be overly anxious since you can use the car in your custody to claim payment by filing a lien on the vehicle.
But what should be considered when registering a Mechanic’s Lien?
Well, since the car is already in your custody and you have completed the requested repairs, all you need to do is comply with the state-specific requirements, and you are good to go.
How to Put a Mechanic’s Lien on a Car – Guide for Mechanics
If you are the mechanic, before you start the lien registration, make sure that the debt is outstanding beyond the agreed payment period. The allowed number of days varies per state, so you should first check with the local jurisdiction.
Assess the Car Owner’s Financial Situation
It is a standard procedure to give the owner a reasonable amount of time to redeem their vehicle. After which, the mechanic’s lien can be filed.
So, before you start putting a lien on a car, you should first assess—off the books—the financial situation of the car owner. This way, you can see if there are other reasonable actions you can take.
This payment method has always been used to resolve genuine issues of nonpayment. Hence, it should not be mistaken as a plan to defraud the car owner.
Therefore, it is advisable to understand the owner’s payment proposal for you to assess if you need to enter into such a lengthy lien registration process.
This is not a legal requirement but it is best to explore other options before starting a mechanic’s lien registration process.
If you must file a lien to resolve the nonpayment issue, use the process outlined below.
Research on Applicable Laws
You should understand the specific laws regarding mechanic’s lien in your area. This is necessary because specific state or county regulations dictate how you will document and file the lien.
Furthermore, different legal jurisdictions have specific limitation periods that must be considered to obtain enforceable liens.
Document All Transactions
You are required to document all the transactions, including services rendered and payment requests. In some states, it is mandatory to outline work particulars (step-by-step) to promote billing transparency.
Notify the Owner Through Certified Mail
You should notify the registered owner of the charges incurred via certified mail. The owner should also be made aware of the plans to seize their car, or in some cases, sell the car through a mechanic’s lien process.
You are legally required to put out a newspaper publication communicating your intention to auction the car 30 days prior. This is required to promote transparency in the whole process and to prevent scammers from taking advantage.
Swear an Affidavit
This is done after the car has been auctioned. It gives the buyer a clean title on the car. It is the legal transfer of the car’s title from the first and second parties—original owner and mechanic—to the third party, who is the auction buyer.
Can I Challenge a Mechanic’s Lien Registered Against My Car? Guide for Owners
Now, if you are the owner, you should know that you can challenge the lien. This enables you to extend the enforcement period or shift part of the responsibility to the mechanic.
However, do note that most legal contests against liens do not succeed. This low success rate is due to the guarantee obtained from the car, which is already in the repairer’s custody by the time the lien is registered.
Being in control of the car in question makes it much easier for mechanics to fight the car owner. Nevertheless, car owners can successfully challenge liens.
Legal battles against liens are mostly based on procedural faults and not on the primary issue of non-payment. This explains why they mostly fail. Still, it is advisable to fight the lien on its procedural weaknesses.
Are you thinking about challenging a lien registered against your car or property? Procedural loopholes described below might help you avoid responsibility.
Here are some of the factors that can help you fight the lien claim:
Misleading or Improper Legal Description
You could petition the Department of Motor Vehicles or the registrar of liens to reject improperly drawn liens. Such description defects should be sufficiently established to overturn the applicant’s claims.
While this does not guarantee an overturn of the mechanic’s rights, you can use this technicality to pressure them to accept your terms.
You should check the wordings of the lien to confirm that the claimant is the exact person, agent, or corporation that you contracted to do your repairs. In most cases, automobile dealers and associated corporations register liens on behalf of individual mechanics.
In such cases, the lien claims can be rejected based on the wrong representation of the applicant. However, this is an ineffective procedural weakness to exploit since the lienholder will just re-file a claim with the correct details.
You can challenge a lien by pointing out repairs that were completed and billed without your consent (actual or implied).
So, it would be best if you re-check the billed repairs against the requested works to check whether the mechanic has inflated the charges.
How Do Liens Resolve Payment Issues?
For some strange reason, mechanics rarely use this process to claim payment. Even so, lien registration has increased in the past few decades.
But how do liens compel car owners to take action, particularly, to make them pay up and take their car off your garage?
Well, mechanic’s liens induce activity in a number of ways:
Registration of Lien Faults the Car’s Title
Registering liens with the Department of Motor Vehicles increases the chances of car owners taking action. Since owners don’t want to have the car title tainted, they are more likely to dig deep into their pockets to prevent a lien from happening.
It simply means that the owner cannot enter into any agreement without considering your claim. As a result, they soon arrive at some agreement to settle the bill.
A Mechanic’s Lien Prompts Action of Third-Party Claimants
Examples of third-party claimants in such cases include lenders and insurance companies. Once the mechanic files a lien, these third parties get involved. This increases the probability of the compensation claim being resolved.
Lenders, for instance, are greatly affected since liens rank above all other claims on the car. Given the high stakes associated with such third-party contracts, lien registration brings these parties on board.
Consequently, there will be more parties working on the payment claim, and that will increase the chances of early settlement.
The Lien Reawakens the Car Owner’s Attention
Filing a lien prompts the car owner to act on the payment issue. This is because registering a lien gives rise to four unique situations:
- The lien is attached to the car’s title. This prevents refinancing and transfer of title.
- The lien’s effects are strong enough to attract the attention of decision-makers either in the family unit or in the company settings. Therefore, non-payment issues are addressed sooner.
- Since most car acquisitions are attached to third-party financing arrangements, registering a lien can complicate the loan process for the borrower. This puts pressure on the owner to address the lien issue sooner to avoid weakening their loan standing.
- Once the lien is filed, the process of removing it is fairly complex and expensive. This situation forces the car owner to address the primary payment claim rather than fight the lien itself.
Firm Deadline Is Set on Payment
A mechanic’s lien, once it’s up and going, addresses the problem of having to wait “perennially” for payment. This deals with the unwanted decision of owners to leave repaired cars with the mechanic.
The practice of not claiming the car even after successful repairs dates back to the early years of the automobile centuries ago. Back then, some owners would instruct mechanics to undertake repair and maintenance on their vehicles without a clear payment plan in mind.
This situation has exposed mechanics to dishonest clients for a long time. Thus, the emergence of liens in 18th and 19th century America provided an effective remedy to this problematic situation.
Liens Are Hard to Challenge
Mechanic’s lien was pioneered as a form of protection to hardworking people like the mechanics. Hence, it ranks highly in the hierarchy of labor regulations around the globe. This strong recognition in law makes it almost impossible to challenge it.
If you are a mechanic, as long as you follow all the technical procedures of registering a lien, you can rest assured that your payment is almost guaranteed.
In a nutshell, a mechanic is legally permitted to seize the car in their custody if the car owner fails to pay as agreed. The procedure of filing a lien is fairly simplified for the repairers.
Simply put, the mechanic has to satisfy that they have complied with the following four conditions to obtain a no-objection sale status on the car:
- Properly present charges to the registered owner through a written statement,
- Obtain a court order or equivalent authorization,
- Notify the owner through an acceptable means, and
- Prove that they adequately engaged the owner throughout the lien registration process.