Mechanics lien title alert
In recent weeks, we have been made aware that the “mechanics lien” process is being offered as a solution to vehicle owners who have titling problems. While there are legitimate processes available for vehicle owners to recover titles, the mechanics lien process is not intended to obtain a title for a person in possession of a vehicle with no title.
Misuse of the process can subject the applicant to criminal and civil liability, and may subject the title to being revoked. In most jurisdictions, the “mechanics lien” process goes something like this:
- A repair facility works on a vehicle for an owner.
- The cost for the repairs are not paid by the owner.
- The facility holds the vehicle for 30 – 60 days.
- The facility is required to send certified mail to all owners and lienholder on the vehicle.
- The facility is required to advertise a notice of public auction in local newspapers.
- The facility conducts a PUBLIC AUCTION offering the car for sale to the HIGHEST BIDDER.
- The facility submits official notarized paperwork with a sworn signature that all of these conditions were met.
- A copy of a signed repair bill is attached to the title application.
- The facility receives a title in the name of the auction buyer, to transfer to that person.
In situations where a mechanic or towing company uses this process to get a title for a person who does not have legal documents, many of these conditions are not being met. First of all, there is no actual repair charges for the car since it was never in the shop for work. In addition, there is no offering to the public to bid on the car. The process bypasses the auction and it is “sold” directly to the person who already “owns” it.
Government and state DMV’s are aware that this process is ripe for abuse, and even fraud. The repair affidavits and garages and tow firms are regularly audited when they send in multiple title applications. If the paperwork is found to be fraudulent, the applicant can run into issues.
Urgent: Police departments nationwide are aware of this scam. Many people have been arrested and convicted for using “mechanics liens” to get car titles. We recommend staying FAR AWAY from this process. Do it right the first time and you’ll be able to maintain clear title to your vehicle.
Here is an example of a crackdown on mechanics liens where dozens were arrested recently.
One family lost a valuable ’65 Corvette in the scam: (Click for details)
Here is an example of a form used in Texas (most states are similar):
Highlights from the form:
MECHANIC’S LIEN FORECLOSURE AFFIDAVIT OF STATUTORY LIENHOLDER
STATE THE DATE REPAIRS WERE COMPLETED AND ATTACH A COPY OF THE WORK ORDER.
Date the owner(s) and lienholder(s), if any, were notified by certified mail of the charges. Such notice must be given thirty (30) days after the
day on which charges accrued and the charges are unpaid. Attach the U.S. Post Office validated (date stamped) receipts for certified mail.
I, the undersigned statutory lienholder, certify that the facts contained herein are true and correct and that the vehicle described above was left for repair and that the
owner(s) and lienholder(s) were notified, as required by statute, to come forward and pay the charges due and pick up the vehicle. Possession of the vehicle has
continued for thirty (30) days after the dates on which notice of the amount of charges were mailed, and such charges remain unpaid. I further certify that I have
complied with all applicable provisions of Chapter 70 of the State Property Code, and I am, therefore, proceeding to foreclose on the statutory mechanic’s lien in
DATE OF PUBLIC SALE LOCATION OF PUBLIC SALE
Hereby sell and assign the vehicle described on this affidavit to the highest bidder at said sale to:
POSSESSION — Must have continued for thirty (30) days after the charges accrued and the charges due have not been paid.
Lienholder may sell the vehicle at public sale without obtaining a release of lien. The proceeds shall be applied to the payment of charges and the balance shall be paid to the person entitled to it.
EVIDENCE REQUIRED TO SUPPORT THE CERTIFICATE OF TITLE APPLICATION, FORM 130-U
Proof shall consist of the U.S. Post Office validated (date stamped) receipts for certified mail (PS Form 3800) and return receipt (PS Form 3811), together with any unopened certified letter(s) returned by the post office as undeliverable, unclaimed, or due to no forwarding address the unopened certified letters that should have been returned as undeliverable, unclaimed, or no forwarding address
Subscribed and sworn to before me_____________________ SIGNATURE OF AFFIANT
Failure to complete or providing a false statement may result in fines and/or imprisonment
As you can see, the states take giving away a vehicle title very seriously. A clean title is what ensures the owner of a vehicle that their possession is legal and will not be challenged later. Using a legal process to recover a missing title is the only way not to worry about liability or risk.