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Before Starting A Mechanics Lien On Any Vehicle.The Bureau of Automotive Repair (BAR), and the Department of Motor Vehicles have very strict rules for mechanics liens.The basis is, but are not limited to;
- You must have a valid (BAR) license.
- You must have a signed work order with the name and address of the person who authorized the repairs.
- The customer must have signed and received a copy of the cost of the repair and signed and received a copy for any additional repairs.
- A mechanics lien must be filed with the Department of Motor Vehicles within 30 days of completing the repairs or billing the customer, which ever came first.
- Your daily storage rate must be posted in clear view of the customer and should be clearly noted on the work order.
Mechanics Lien On A Vessel/Boat.
It is not necessary to have a "BAR" license to work on vessels/boats, and the time you have to file a lien is extended to 60 days from completion of the work or billed the customer, which ever came first. You must have a signed work order with the name and address of the person who authorized the repairs and the customer must have received a copy of the cost of the repair, and signed and received a copy for any additional repairs, and your storage rate per day must be clearly posted on your work order and clearly posted within your customer's view.
Avoid Running into Problems!
If any items above have not been completed, or if after reading this page you are still not sure about your scenario, I-Lien Lien Service highly recommends you call the BAR and get their blessings before preceding or submitting a mechanics l ien for processing. Other Options, you may have the option to file a lien for storage only, which will not include any cost for labor or materials, it is for storage at your posted rate per day. For a storage only lien click this link.
What is a lienholder?
A lienholder is the person or entity who has interest in the vehicle due to storage, repairs, and/or towing costs.
When may you begin your lien sale?
Your lien becomes effective at the time the work is completed or the owner is billed, which ever came first.
When does I-Lien want me to file your lien?
From the time the work is completed or the customer was billed, which ever came first, you have 30 days to file for your lien, however, you must start the lien process within 15 days for storage fees to continue, storage fees can begin again after you start the lien process. To be on track, we would like to see the order on or before the 10th day.
How do you know what type of lien you need to file? (under $4000, over $4000, etc.)
For Mechanics Liens the vehicle/vessel value = (the value "AS IS" + the cost of repairs). If you estimate the value to be over $4000 (vehicle) or over $1500 (vessel) then it is a long lien (over). If the value is less than that amount, then it is a short lien (under). After submitting your order, we can help determine that with you.
What we will you need from you?
- We will need some basic information about you, your shop/garage, and your storage facility.
- Value of the vehicle/vessel - For any Under $4000 Lien we will need a Form 180 or photos to document the value of the vehicle/vessel.
- Name and address of the person(s) who ordered the work done.
- Date of possession.
- Date work completed and date of the last billing (must be within the last 30 days).
- Your posted storage rate.
- The year, make, model, license number, and vehicle ID (vin) and engine number if a motorcycle. For vessels, the -OF- number or the hull number, builder, type, and length. If the vessel has a trailer we will also need the same information as for a vehicle.
- Possession of the Vehicle/Vessel. Loss of possession immediately stops your lien. Moving the vehicle also stops your lien.
How long does it take to complete a lien sale?
Vehicles under $4000 and boat under $1500, approximately 35 days.
Vehicles over $4000 and boat over $1500, usually 90 to 120 days.
How much storage should you charge?
Storage rates are not regulated by the State of California. If you are a business who makes it a practice to regularly store vehicles, your daily storage rate should be clearly posted within your customer's view. A lien sale will typically provide you with no more than 60 days of storage at your posted rate. However, if the vehicle has out of state plates, if the vehicle ID (VIN) has been altered or removed, if a person of interest arrives after the lien sale has been started, or if the lien sale has been opposed and we have received a Letter of Continuation from the California Department of Motor Vehicles, or if the vehicle's value be determined to be more than $4,000.00 you may be eligible for up to 120 days of storage at your posted rate.
Who determines the value of the vehicle?
A Public Agency (DMV, CHP, Police) can place an estimated value on the vehicle. Otherwise you can determine the estimated value - Mechanics Lien value = value of the vehicle as is + parts and labor.
What if there is a legal owner of the vehicle?
YES. The legal owner must be notified before the cost of repairs exceeds $1500.00 or storage exceeds $1025.00. If they are not notified, the legal owner will not be liable for any amounts above that amount. Remember the legal owner owns that vehicle/vessel not the registered owner, and they are probably not aware of what the registered owner is doing or in many cases they may be looking for that vehicle. Do not invest in parts, labor or storage past those amounts without approval from the legal owner, you may loose it!
Can someone stop the lien sale?
YES. Any person known to have an interest in the vehicle may stop your lien by filing a Declaration of Opposition with the California Department of Motor Vehicles within the time frame allowed by law (Typically within 10 days of mailing the Notice of Pending Lien Sale.) A Declaration of Opposition is (and must) be included with the Notice of Pending Lien Sale we mail to all Registered Owners, Legal Owners and Interested Parties.
What if someone stops (opposes) your lien sale?If you are notified by the California Department of Motor Vehicles or by a representative of I-Lien Lien Service that a valid Declaration of Opposition has been received, you have the following options:
- Obtain a release of interest from the opposer.
- File a court action against the opposer within 30 days, and receive a judgment in your favor.
- Determine that the opposer cannot be served at the address indicated on the Declaration of Opposition (You will need documentation from a process server or Marshall to proceed).
Regardless of which of the three options you pursue, a DMV authorization to continue will be required before you can proceed with the lien sale. Therefore, we advise you to forward any and all documentation you receive regarding an opposed lien sale to our office. We will need to file your documents with the California Department of Motor Vehicles so that we may receive the appropriate continuation documents on your behalf.
What if your customer pays part of their bill?
Accepting any amount of money from your customer will invalidate your lien! Once you accept any money from your customer, the lien sale is canceled.
What do you do with the personal property in the vehicle?
No lien shall attach to any personal property in the vehicle. The personal property in or on the vehicle shall be given to the current registered owner upon demand (personal property does not include wheels, radios, speakers or anything attached to the vehicle). The lienholder shall not be responsible for personal property after the lien sale date.
Can you conduct a lien sale on a vehicle located out of state?
No. If the vehicle in your possession has California license plates and you are out-of-state, you must follow the lien sale laws of that state. However, if the vehicle in your possession is located within California, we can lien it even if the vehicle is registered out-of-state.
What do you do on the day of sale?
The vehicle must be available for inspection at least one hour prior to sale. A lien sale is a public sale and anyone with an interest, including the the general public or those claiming an interest in the vehicle, are welcome to attend and bid on the vehicle. Bidding generally starts at what is owed - sealed bids are not allowed.
What happens after the lien sale?
Sign and date all lien sale documents and deliver them to the purchaser at the time of sale. The purchaser is granted FIVE days to submit a completed and signed set of lien sale documents to any authorized California Department of Motor Vehicles field office.
What if you sell the vehicle for more than you are owed?
If you sell the vehicle for more than you are owed, you must remit any excess monies received to the Department of Motor Vehicles, Lien Sale Section, 2415 1st Ave., Sacramento, CA 95818 for deposit into the Motor Vehicle Account, State Transportation Fund. Remit with a completed copy of the Certificate of Lien Sale.
Do you have to register the vehicle after the sale?
NO, the lien sale documents do not expire, however, DMV fees will continue to accrue. If the vehicle registration expired while in your possession and you are a dealer, lessor retailer, garage, or operator of a towing service and you sell the vehicle, the buyer has 20 days from the lien sale date to pay fees without penalty, or pay a transfer fee and a planned non-operation fee. Otherwise, a planned non-op must be filed prior to the vehicle expiration date or penalty fees are due. If the vehicle came into your possession with an expired registration, the buyer must pay all back registration fees and penalties. If the vehicle is sold to a licensed junk, scrap, or wrecking facility, all fees and penalties are waived.
Simply, prior tickets for parking violations and vehicular infractions are not the buyer's responsibility. If the vehicle comes into your possession with expired registration, the buyer will be required to pay the fees and the penalties to properly register the vehicle. If the vehicle registration expired while in your possession, the buyer can usually pay the fees without paying a penalty if registered within the allotted time.
What I-Lien Lien Service will do for you.
We will supply all documents and DMV fees necessary to apply for the Authorization to Conduct a Lien Sale. We will notify all registered and legal owner(s) and known parties of interest of the pending lien sale. We will run the required newspaper advertisement (cost of the ad is additional), and we will notify you of the sale date and provide all final lien sale documentation for transfer of title, or salvage, approximately 12 days prior to the sale day.