The Expert Podcast

So how do you file for a mechanic's lien on an abandoned vehicle? Well, first of all, it's very important to distinguish between a mechanic's lien and an abandoned vehicle because abandoned vehicles have a lot of limitations on what you can do. In most cases, the vehicle that you're trying to get a title for really is not abandoned because if you call it abandoned, you're probably going to lose out on what you're trying to do with your title. We'll talk about that. As an example, we're going to take a look at a specific state—happens to be Maryland—and how they address mechanic's liens, how you get titles, and what you can and can't do.

Remember, we do have a service where if you want assistance with this mechanic's lien vehicle title process, you can access that on our website, and we can give you more information either as instructions, or we could do it for you, or we can even do a consultation. So first, we're going to look at the Maryland Department of Transportation Motor Vehicle Administration entitling a vehicle with a mechanic's lien.

Now, remember, this is just one state, but most states have about the same rules. The reason we selected this one to give you as an example—even if you're not in Maryland—the chances of you being in Maryland are very slim because it's the smallest state in the country, and there are 50 states, so you're probably not in Maryland. But the rules here are probably very similar or the same as your state. Why is that? Most states use the federal guidelines for mechanic's liens and abandoned vehicles.

So what is a mechanic's lien? You can put it against a vehicle by a repair or storage facility if the owner fails to pay the repair bill and leaves the vehicle in the custody of the facility. Now, think about that—this is not abandoned. They intentionally gave it to you in your custody for an extended period of time. After taking the action required to establish a lien, the facility can then sell the vehicle to recoup the money owed to you. That sounds like what you want to do.

Now, don't be scared by what it says here—that you have to sell the vehicle at a public auction. It's not like you have to bring it to some auction and let them auction it off. You hold the vehicle on your premises, and you just give the public a notice that they can come offer you a bid. You don't have to take their bids—you could put your own bid in and beat everybody. It's not like you have to pay anybody money; the money's going right to you. You just have to at least let the public offer you something for it.

What are the rules for obtaining a mechanic's lien? Remember, this is a brief overview, but it does give you some insight into how it works. All of the following must be true before you can establish a mechanic's lien. Notice the first word—ALL. You have to have all of these true:

Charges for the vehicle or vehicle repairs must go unpaid for at least 30 days, meaning that you can't just jump the gun and file it two days after the guy dropped off the car—you have to wait a month.
Charges must be supported by a repair authorization. What does that mean? You have to have a completed repair order authorized by the vehicle owner, including a detailed description of the work performed. So you can't just make stuff up—you have to have it in writing, and the owner has to sign it before you do the work. So that's important.
Now, if you don't have that or don't meet any of these other criteria, there are other ways you can get a title. Our website will give you what's called a civil lien, a court order title, or a bonded title. There are other things you can do, so if you don't meet these criteria, don't worry—you can do other things, and sometimes those other things are actually easier.

If you want to charge storage fees, you have to have a storage contract. You can't just make up storage fees out of the blue and say, "I'm charging you $20 a day." Can't do it. You have to have it in writing and signed. See what it says right here? Signed by the vehicle owner—written statement.

Look at what it says on Notes #1—very clear. A vehicle that has been abandoned does not qualify for a mechanic's lien. So don't start calling these vehicles abandoned. We've had so many clients that have come to us and said, "I tried to file for an abandoned vehicle, and I lost the car. What can I do?" What can you do? Nothing. If you call it abandoned and the government comes and impounds the vehicle—which they will if you call it abandoned—you're done. You're out of the loop because now you can't keep it.

Your video will be back in 8 seconds. In the meantime, remember you have access to live one-on-one consultation, undivided attention of a licensed certified expert in this subject and many others. We want to listen to your story, hear your questions, and give you expert advisement on your options. We want to tell you what we know about your situation and what options you have.

Now, back to your video. What happens if the vehicle's abandoned? The local police department should be contacted. What it doesn't tell you is what they're going to do when they're contacted. They're going to come get the vehicle. There's a clue here, though—it says "Certificate of Salvage." That's what they're going to do—they're going to salvage and junk the car if you call it abandoned. So you probably don't want to do that.

Now, let's look at the steps you have to take. How do you establish a mechanic's lien? At least 10 days prior to the planned auction date, you have to send a notification letter by registered mail to all the persons listed below:

The owner of the vehicle
The person who left the vehicle (if different from the owner). So if the vehicle is owned by Joe Smith and Sally Smith dropped it off, you have to send a letter to each of those people.
All holders of a security interest (lienholders). If the vehicle has a lienholder, you have to send them a notice.
The DMV or other government authority.
What has to be in that letter? The VIN number, year, and make; a list of all the charges owed to you (a breakdown of the fees you're claiming); and a notice that the vehicle is going to be auctioned, including the date and time of the auction.

You must also place a notice in the newspaper, and it's very specific how you have to do it. It has to include the date and time of the auction, a detailed description of the vehicle, and it must be published once per week for two consecutive weeks, with seven days in between those publications. If the newspaper advertisement is incorrect—meaning you don't wait the right number of days, do it too soon, or too late—you must re-advertise and send the certified letters again. Remember, each one of these certified letters could cost seven or eight bucks, so you don’t want to have to do that twice.

Then you hold your auction, and you get your title.

What are the downsides? First of all, if you're not a licensed repair facility, you can't do this. You can't just fix cars in your backyard and do a mechanic's lien because you're an illegal mechanic to begin with. You can't make up storage fees out of the blue. You also can't wait too long. Most states have a rule that says you have to do this within six, eight, or ten months. If you've been sitting on a car for ten years, you can't do a mechanic's lien. Most of the time, if you've had a car for more than two or three years, you're out of luck for a mechanic's lien.

But there are other things you can do that still get you a title, and a lot of times, those other things are better than a mechanic's lien—like a civil lien, court order title, bonded title, or VT transfer. Our website will give you those instructions.

A mechanic's lien is a powerful tool to get a title for a vehicle that has other problems. However, don’t do a fake mechanic's lien. If a person really did not bring their car in for repairs and you don't have a signed repair order, don't start making stuff up.

If you have more questions about how to run one of these, do the paperwork, or you just want us to do it for you, click the link below—cartitles.com. We can take care of that for you, or if you want to consult with a certified title agent, you can do that as well. If you found this video helpful, check out other videos on our channel for more insights into resolving your particular situation.