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Liens

DEFINITION OF A LIEN SALE 

When a person repairs, tows or stores a vehicles and has not been paid by the owner of the vehicle for services rendered, that person has a lien against the vehicle.  The lien arises when the owner is provided a written statement of charges for the services rendered.  If a vehicle is towed by a law enforcement agency or private towing company, the lien arises at the time the vehicle is towed.   

For a person to conduct a lien sale, they must have physical possession of the vehicle in the state of California. 

A lien sale is a public auction.  Anyone may appear and bid.  Sealed bids are not allowed. 

There are three different lien processes: 

  • Disposal ($0 - $500)
  • Regular  ($501 - $4000)
  • Over $4K ($4001 & Over) (Businesses & Self Storage Facilities)

There are three different lien types: 

  • Public Agency
  • Mechanic
  • Private Party  

DISPOSAL LIEN 

A disposal lien is a lien that is done on a vehicle with a value less than $500 and takes 15 days for the lien to clear.  On the disposal date the license plates must be removed and the vehicle must be sold to a scrap iron dealer or a licensed dismantler.  It cannot be registered or sold to the public. 

REGULAR LIEN 

A regular lien is a lien that is done on a vehicle with a value from $501 to $4000.  This type of lien takes 30-41 days to clear.  At least 10 days prior to the sale date the notice of pending lien sale must be posted in a conspicuous place at the lien sale location.   

On the day of the sale, the vehicle must be available for inspection at least one hour prior to the sale.  If no one places a qualifying bid, complete the certification of lien sale showing you as both the buyer and seller.  Remove and destroy the license plates and submit a notice of release of liability to DMV within five days.   

If you have a buyer, complete the certification of lien sale as the seller and give it to the buyer along with the rest of the lien package.  Have the buyer sign and receive a copy of the Buyer/Seller Warranty.  Keep a copy for yourself.  If excess money is received from the sale of the vehicle, make a copy of the certification of lien sale and mail the form with the excess money to the Lien Sale Unit of the DMV.  Remove and destroy the license plates and submit a notice of release of liability to DMV.   

If you sell the vehicle later, you are required to give the new buyer a bill of sale with the lien sale documents. Have the buyer sign and receive a copy of the Buyer/Seller Warranty.  Keep a copy for yourself.   

OVER $4K 

An over $4k lien is a lien that is done on a vehicle with a value over $4000.  Generally, this type of lien is only done by businesses and self storage facilities.  This lien is a two step process and can take up to 120 days to complete.  The customer must provide the public agency or name and address of the person who authorized the repairs, storage and/or towing.  The DMV will not accept the lien without it. 

First Step:  We submit a request for authorization to conduct a lien sale, plus a fee, to the DMV.  We must wait for authorization from the DMV before proceeding with the lien sale process.  This can take approximately 30-90 days.   

Second Step:  We receive authorization and prepare a lien sale package for the customer.  At least five days but not more than 20 days before the sale date, the customer must give notice of the sale by advertising the sale for one day in a newspaper of general circulation in the county in which the vehicle is located.  If there is no newspaper published in the county, notice shall be given by posting the notice of pending lien sale in three of the most public places in the town where the vehicle is located and at the place where the vehicle is to be sold for 10 consecutive days prior to and including the day of the sale. 

Ad Example: LIEN SALE MM/DD/YR @ 9 A.M.

            Anyplace Business

            1234 Nowhere Road

            Someplace, CA  12345

            2005 Lincoln Navigator

            License:  5VTV123 CA

            VIN:  4XAFG50A042568792 

The vehicle must be available for inspection at a location easily accessible to the public for at least one hour before the sale and must be at the place of sale at the time and date specified on the notice of sale.  If the auction price exceeds the amount of the lien, the excess amount must be sent to the Lien Sale Unit within 15 days after the sale date.  After the sale, a redemption period of 10 days (not counting the date of sale) is required before the purchaser can take possession of the vehicle and apply for transfer of ownership.  After the redemption period give the buyer the lien sale package and a copy of the authorization letter from DMV.  The license plates must be removed and destroyed at the time of the sale and you must submit to DMV within five days of the sale a Notice of Transfer and Release of Liability. 

If no one places a bid on the vehicle, complete the certification of lien sale showing you as the buyer as well as the seller.  If you sell the vehicle later, you are required to give the buyer a bill of sale in addition to the lien package. 

PUBLIC AGENCY 

A public agency lien is a lien that is done by towing companies in which a law enforcement agency has authorized the towing of the vehicle. 

MECHANIC LIEN 

A mechanic lien is one that is done by the auto industry for a vehicle that has been repaired or where there have been supplies/materials furnished for it.  Once repairs have been completed, you have 15 days to present the owner of the vehicle with a written statement of charges, either in person or by mail.  Be sure to indicate your daily storage rate.  After the owner is notified of the charges, or 15 days after the work is completed, you have 30 days to start a lien.
 
The legal owner of a vehicle is not responsible for repairs over $750 or storage over $400 if the vehicle value is less than $4000 or $500 if the vehicle value is over $4000, unless you receive written permission from them.  If you are doing a large, non-insurance job, you should request to see the vehicle’s registration and verify if there is a legal owner.
 
You cannot claim repairs on a lien without a valid Bureau of Automotive Repair license number.


PRIVATE PARTY 

A private party lien is a lien that is done by private individuals and other types of businesses claiming only storage.  It can also be done by towing companies where an individual requested the tow and there was no law enforcement agency involved.