The Expert Podcast

So let me guess, you tried to file for a mechanics lien on a vehicle and it was rejected by the DMV. It was sent back. Why is that? It's very common. We get about 100 calls a day from automotive facilities, auctions, dealers, towing companies, and repair shops that filed for a mechanics lien, and it got rejected. How come? Well, here's the thing: more than half of applications for mechanic liens get sent back, and here's why.

First of all, a mechanics lien is a process that a licensed automotive facility can use to get a title for a vehicle that was brought to their shop for repairs and the person didn't pay the bill. But what happens is a lot of mechanic shops out there will do a fake mechanics lien to help their buddy get a title for a car or charge somebody a few hundred bucks to solve a title problem. So what happens is the titling authority in every state knows there are a lot of fake mechanics liens, so they scrutinize these with a fine-tooth comb. Even if you send one in that's correct, a lot of times they'll send it back saying it's wrong, just to try to scare you off from doing a fake mechanics lien. So, if you are a legitimate licensed mechanic shop and you are filing a mechanics lien for a car that was brought into your shop, you did the work, and you have a signed repair order, if it's right, send it back in. It'll probably go through the second time.

What else are reasons why it could get rejected? Well, in almost every state, there's a limit of time you have to file a mechanics lien. You can't sit on a car for five years and then file it later, right? You have to file it within a certain period of time. Some states it's six months, some states it's 12 months, and a few states are 18 months or two years, but you have to file it within a certain period of time. You also have to have a signed repair order. In most states, you can't just arbitrarily say, "This car, I did work on it." You have to have approval to have done work on it, a signed request to do work, and a quote and acceptance of the quote. So, if you don't have that, it might get rejected.

You also have to follow certain very significant steps. Now, we're going to tell you in a minute how you can avoid all this and maybe get a title without having to go through a mechanics lien. There's an alternate way to do this, but the steps you have to do for a mechanics lien are sending out notices to the lienholder and the owner via certified mail, putting an ad in the newspaper, doing an auction—there's a whole series of hoops you have to jump through. If you do any one of them wrong, or if you don't wait the right amount of time, if you send out certified mail but don't wait 30 days before you do the next step, you're out of luck. Or, if you send out certified mail and use the address you had on the repair order or from the glove compartment, that might get sent back because you're supposed to get a printout from the titling authority from the DMV showing what address for the owner you're supposed to send it to. If you didn't ever request the printout from the DMV, they'll reject it altogether. So, expect that half the time or more, if you file for a mechanics lien, it will get rejected.

So, what do you do instead? Well, instead of a mechanics lien, consider a civilian title, sometimes called a magistrate title or a court order title. There'll be a link below for more information about it. This bypasses the DMV. The DMV has certain requirements—you have to fit a certain mold of requirements to get a title from the DMV with a mechanics lien. Either it has all those things met, or it doesn't, and if it doesn't, you're out of luck. A court has a lot more latitude. The magistrate, the court clerk, or the civil authority—whoever it is—they can give you some leeway. They can say, "Well, you did all the right things, so here's your paperwork." We recommend starting with that first.

Now, the court might say, "Hey, you got to do the mechanics lien first. If that doesn't work, come back to see us," but start with the magistrate because it's a more direct route. You're like going over the head of the DMV. It's also less likely to get rejected. The only time we see it get rejected is if it's obvious you do not deserve that car. If it's stolen, if somebody else has a claim to it, if you're not in possession of it, if there's something going on that's fishy, you're not going to get a title. But you wouldn't have gotten a title anyway. The court is there to help you if you have difficult title problems.

So, look at that lien title or that civil title, whatever it's called in your jurisdiction, as an alternative to a mechanics lien. If you've been rejected for a mechanics lien, turn right around and look at this civil lien process because it might solve your problem. In fact, in the future, you might do this all the time. In fact, a lot of the clients we talk to that come to us to do mechanics liens, once we talk to them about a civil lien, they say, "Why doesn't everybody just do this? Why do I even bother with a mechanics lien?" And that's a good question because it is a lot better. A lot more powerful.