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Vehicle Storage Lien Law Review

TIADA frequently receives calls regarding the laws that regulate vehicle storage facilities (VSF) after a customer's vehicle is towed and then impounded.  Applicable provisions of the Texas Occupations Code and Texas Administrative Code are provided below as a reference to independent dealers.
In general a vehicle storage facility or VSF must be licensed by the Texas Department of Licensing and Regulation.  A few tips if you receive invoices or notices (or no notices) that are out of the ordinary.
 
 
Verify the storage license!  You can search here to confirm:  https://www.tdlr.texas.gov/verify.htm

Notice: In general a storage facility must provide notice via certified mail to the lienholder (can be electronic or via publication in some instances).  Must be sent within FIVE days of impound or tow.

Location and condition of the vehicle:  Inspect the vehicle BEFORE making any payment for storage fees as the vehicle may be in damaged condition.
Watch the fees, dates, and time:  The VSF may NOT charge certain fees until 24 hours after the vehicle storage facility sent the notice above.
Did the vehicle storage yard sell, auction, or foreclose on your vehicle without following all required laws and regulations?  You may have civil relief against the VSF for their failure to follow applicable laws and procedures outlined below.  Please consult with an attorney for additional consultation.
Other violations of law:  If the vehicle storage facility did not follow all of the laws, failed to send notices via certified mail, or lied on the Storage Lien Foreclosure form submitted to the DMV via VTR -265, it may be a felony.  Again, dealers are able to file complaints with the Texas Department of Licensing and Regulation if they believe that a violation has occurred.
 
What fees can a VSF charge, and how much are those charges?
A VSF is allowed to collect fees for the towing of a vehicle, but only the fees that are directly related to the tow.
A VSF is allowed to charge a daily storage rate of $20/day for vehicles that are 25 feet in length or less, and $35/day for vehicles over 25 feet in length.
If the first notification to the owner and lienholder is not sent by the fifth day (if registered in Texas) or the 14 day (if registered in another state), the VSF cannot charge any storage until 24 hours after the notice is sent.
If the second notice to the owner and lienholder is not sent before the 21st day after the date the first notice is mailed, the VSF must stop storage and can only restart storage 24 hours after the notice is mailed. 
A VSF may charge a one-time $20 fee for the impoundment of a vehicle. This fee is for tarping and locking the vehicle if necessary, for running the motor vehicle registration, and/or for conducting an inventory and securing all unsecured property. (NOTE: A VSF is not required to do an inventory.)
A VSF may send a onetime fee of $50 for sending notification letters to the owners and all lienholders on the vehicle.
For vehicles registered in Texas the notification letter:
Must be sent certified mail return receipt requested, or electronic certified mail;
Must be sent by the fifth day the vehicle is on the lot; and
Cannot be sent until the vehicle is on the lot for at least 24 hours.
For vehicles registered in another state:
Must be sent certified mail return receipt requested, or electronic certified mail;
Must be sent by the 14th day the vehicle is on the lot;
Cannot be sent until the vehicle is on the lot for at least 24 hours.
At this time, an environmental fee cannot be charged by a VSF.
A VSF may collect a governmental entity fee if required by the jurisdiction where the vehicle is stored.
 
Texas Occupations Code Sec. 2303.151.  NOTICE TO VEHICLE OWNER OR LIENHOLDER.  (a)  The operator of a vehicle storage facility who receives a vehicle that is registered in this state and that is towed to the facility for storage shall send a written notice to the registered owner and the primary lienholder of the vehicle not later than the fifth day after the date but not earlier than 24 hours after the date the operator receives the vehicle.
(b)  Except as provided by Section 2303.152, the operator of a vehicle storage facility who receives a vehicle that is registered outside this state shall send a written notice to the registered owner and each recorded lienholder of the vehicle not later than the 14th day after the date but not earlier than 24 hours after the date the operator receives the vehicle.
(b-1)  The operator of a vehicle storage facility shall send a written notice required under Subsection (b) to an address obtained, by mail or electronically, either:
(1)  directly from the governmental entity responsible for maintaining the motor vehicle title and registration database for the state in which the vehicle is registered; or
(2)  from a private entity authorized by that governmental entity to obtain title, registration, and lienholder information using a single vehicle identification number inquiry submitted through a secure access portal to the governmental entity's motor vehicle records.
(b-2)  An address obtained electronically from a governmental entity under Subsection (b-1)(1) must be obtained through the governmental entity's secure access portal.
(c)  It is a defense to an action initiated by the department for a violation of this section that the operator of the facility unsuccessfully attempted in writing or electronically to obtain information from the governmental entity with which the vehicle is registered.
(d)  A notice under this section must:
(1)  be correctly addressed;
(2)  carry sufficient postage;  and
(3)  be sent by certified mail, return receipt requested or electronic certified mail.
(e)  A notice under this section is considered to have been given on the date indicated on the postmark and to be timely filed if:
(1)  the postmark indicates that the notice was mailed within the period described by Subsection (a) or (b), as applicable;  or
(2)  the notice was published as provided by Section 2303.152.
(f)  If the operator of a vehicle storage facility sends a notice required under this section after the time prescribed by Subsection (a) or (b):
(1)  the deadline for sending any subsequent notice is determined based on the date notice required by this section is actually sent;
(2)  the operator may not begin to charge the daily storage fee authorized under Section 2303.155(b)(3) for the vehicle that is the subject of the notice until 24 hours after the operator sends the notice required under this section; and
(3)  the ability of the operator to seek foreclosure of a lien for storage charges on the vehicle that is the subject of the notice is not affected.
(g)  Notwithstanding any other law, a state agency or county office may not require proof of delivery of a notice sent under this section in order to issue a title for the vehicle that is the subject of the notice if proof is provided that the notice was mailed in accordance with this section.
 
Texas Occupations Code Sec. 2303.1511.  VEHICLE STORAGE FACILITY'S DUTY TO REPORT AFTER ACCEPTING UNAUTHORIZED VEHICLE.  (a)  A vehicle storage facility accepting a vehicle that is towed under this chapter shall, within two hours after receiving the vehicle, report to the local law enforcement agency with jurisdiction over the area from which the vehicle was towed:
(1)  a general description of the vehicle;
(2)  the state and number of the vehicle's license plate, if any;
(3)  the vehicle identification number of the vehicle, if it can be ascertained;
(4)  the location from which the vehicle was towed; and
(5)  the name and location of the vehicle storage facility where the vehicle is being stored.
(b)  The report required by this section must be made by telephone or electronically or delivered personally or by facsimile.
(c)  This section does not apply to a vehicle received as a result of an incident management tow requested by a law enforcement agency unless the law enforcement agency requests a report of incident management tows within the jurisdiction of the agency.  In this subsection, "incident management tow" has the meaning assigned by Section 2308.002.
 
Texas Occupations Code Sec. 2303.152.  NOTICE BY PUBLICATION.  (a)  Notice to the registered owner and the primary lienholder of a vehicle towed to a vehicle storage facility may be provided by publication in a newspaper of general circulation in the county in which the vehicle is stored if:
(1)  the vehicle is registered in another state;
(2)  the operator of the storage facility submits to the governmental entity responsible for maintaining the motor vehicle title and registration database for the state in which the vehicle is registered a request for information relating to the identity of the registered owner and any lienholder of record that is either:
(A)  written; or
(B)  electronic, through the governmental entity's secure access portal;
(3)  the identity of the registered owner cannot be determined;
(4)  the registration does not contain an address for the registered owner; or
(5)  the operator of the storage facility cannot reasonably determine the identity and address of each lienholder.
(b)  A written request under Subsection (a)(2)(A) must:
(1)  be correctly addressed;
(2)  carry sufficient postage; and
(3)  be sent by certified mail, return receipt requested, or electronic certified mail.
(b-1)  An electronic request under Subsection (a)(2)(B) must be submitted either:
(1)  directly to the governmental entity through the governmental entity's secure access portal; or
(2)  to a private entity authorized by the governmental entity to obtain title, registration, and lienholder information using a single vehicle identification number inquiry submitted through a secure access portal to the governmental entity's motor vehicle records.
(c)  Notice by publication is not required if each notice sent as provided by Section 2303.151 is returned because:
(1)  the notice was unclaimed or refused;  or
(2)  the person to whom the notice was sent moved without leaving a forwarding address.
(d)  Only one notice is required to be published for an abandoned nuisance vehicle.
(e)  Notice to the registered owner and the primary lienholder of a vehicle towed to a vehicle storage facility may be provided by publication in a newspaper of general circulation in the county in which the vehicle is stored if:
(1)  the vehicle does not display a license plate or a vehicle inspection certificate indicating the state of registration;
(2)  the identity of the registered owner cannot reasonably be determined by the operator of the storage facility; or
(3)  the operator of the storage facility cannot reasonably determine the identity and address of each lienholder.
  
Texas Occupations Code Sec. 2303.153.  CONTENTS OF NOTICE.  (a)  A notice by mail provided under Section 2303.151 must include:
(1)  the date the vehicle was accepted for storage;
(2)  the first day for which a storage fee is assessed;
(3)  the daily storage rate;
(4)  the type and amount of any other charge to be paid when the vehicle is claimed;
(5)  the full name, street address, and telephone number of the vehicle storage facility;
(6)  the hours during which the owner may claim the vehicle; and
(7)  the facility license number preceded by "Texas Department of Licensing and Regulation Vehicle Storage Facility License Number" or "TDLR VSF Lic. No."
(b)  A notice by publication provided under Section 2303.152 must include:
(1)  the vehicle description;
(2)  the total charges;
(3)  the full name, street address, and telephone number of the facility; and
(4)  the department registration number.
(c)  Notice by publication is not required to include any information other than that listed in Subsection (b).
(d)  Notice by publication may include a list of more than one vehicle, watercraft, or outboard motor.
 
Texas Occupations Code Sec. 2303.154.  SECOND NOTICE;  CONSENT TO SALE.  (a)  If a vehicle is not claimed by a person permitted to claim the vehicle before the 10th day after the date notice is mailed or published under Section 2303.151 or 2303.152, the operator of the vehicle storage facility shall consider the vehicle to be abandoned and, if required by the law enforcement agency with jurisdiction where the vehicle is located, report the abandonment to the law enforcement agency.  If the law enforcement agency notifies the vehicle storage facility that the agency will send notices and dispose of the abandoned vehicle under Subchapter B, Chapter 683, Transportation Code, the vehicle storage facility shall pay the fee required under Section 683.031, Transportation Code.
(b)  Notice under this section must include:
(1)  the information listed in Section 2303.153(a);
(2)  a statement of the right of the facility to dispose of the vehicle under Section 2303.157;  and
(3)  a statement that the failure of the owner or lienholder to claim the vehicle before the 30th day after the date the notice is provided is:
(A)  a waiver by that person of all right, title, or interest in the vehicle;  and
(B)  a consent to the sale of the vehicle at a public sale.
(c)  Notwithstanding Subsection (b), if publication is required for notice under this section, the notice must include:
(1)  the information listed in Section 2303.153(b);  and
(2)  a statement that the failure of the owner or lienholder to claim the vehicle before the date of sale is:
(A)  a waiver of all right, title, and interest in the vehicle;  and
(B)  a consent to the sale of the vehicle at a public sale.
(d)  Not earlier than the 15th day and before the 21st day after the date notice is mailed or published under Section 2303.151 or 2303.152, the operator of a vehicle storage facility shall send a second notice to the registered owner and each recorded lienholder of the vehicle if the facility:
(1)  was not required to make a report under Subsection (a); or
(2)  has made a required report under Subsection (a) and the law enforcement agency:
(A)  has notified the facility that the law enforcement agency will not take custody of the vehicle;
(B)  has not taken custody of the vehicle; or
(C)  has not responded to the report.
(e)  If the operator of a vehicle storage facility sends a notice required under this section outside of the time described by Subsection (d):
(1)  the deadline for sending any subsequent notice is determined based on the date notice under this section is actually sent;
(2)  the operator may not charge the daily storage fee authorized under Section 2303.155(b)(3) for the vehicle that is the subject of the notice during the period beginning on the 21st day after the date that notice under Section 2303.151 is sent and ending 24 hours after notice under this section is sent; and
(3)  the ability of the operator to seek foreclosure of a lien for storage charges on the vehicle that is the subject of the notice is not affected.
(f)  Notwithstanding any other law, a state agency or county office may not require proof of delivery of a notice sent under this section in order to issue a title for the vehicle that is the subject of the notice if proof is provided that the notice was mailed in accordance with this section.
(g)  A report sent under Subsection (a) may, at the discretion of the law enforcement agency, contain a list of more than one vehicle, watercraft, or outboard motor.
   
16 Texas Admin Procedure 85.200. License Required--Vehicle Storage Facility. (New section adopted effective April 15, 2008, 33 TexReg 2931)
A person may not operate a VSF unless the person holds a VSF license issued by the department.
For purposes of this section, each VSF physical location or lot is a separate facility and must obtain a VSF license.

16 Texas Admin 85.708. Responsibilities of Licensee--Rights of Owner or Authorized Representative. (New section adopted effective April 15, 2008, 33 TexReg 2931; amended effective January 16, 2012, 37 TexReg 112)
(a) A VSF must allow a person claiming to be the owner of a vehicle stored or parked at the facility to have access to the vehicle's glove compartment, console, or other interior storage area if documents necessary to establish the person's identity or ownership of the vehicle are located in the glove compartment, console, or other interior storage area.
(b) When a person demonstrates ownership or right to possession of a motor vehicle stored at a VSF, the person or his/her authorized representative shall:
(1) be entitled to inspect a copy of the tow ticket for the motor vehicle and shall not be required to pay any fees or charges before doing so (reasonable opportunity to view the tow ticket displayed behind a glass enclosure satisfies this requirement);
(2) be given access to, and be allowed to remove, any personal belongings in the vehicle, unless otherwise indicated by a law enforcement officer (the VSF must require a receipt from the person to whom the personal belongings are released for any such property removed from the stored vehicle by the vehicle owner or authorized representative);
(3) have access, during normal business hours, to the vehicle for the purposes of insurance and/or repair estimates; and
(4) on request, have access to the current nonconsent towing fees schedule relating to required posting at a VSF for the towing company that towed the vehicle to the VSF.
(c) When right of possession is demonstrated by submission of a proof of loss claim form from an insurance company, subsection (b)(2) does not apply.
(1) For purposes of this subsection, when an insurance company presents a proof of loss claim form, the term “access” includes, but is not limited to:
(A) verifying the present existence of such vehicle,
(B) confirming the loss,
(C) taking measurements and photographs of the interior and exterior of said vehicle,
(D) recording or attempting to ascertain mileage,
(E) verifying the VIN plate or label,
(F) opening or attempting to open doors, hood or trunk panels,
(G) writing a repair estimate, documenting features, options and conditions, and
(H) when authorized by the owner, operator or lessee of the vehicle, removing the vehicle from the VSF.
(2) Upon the request of an insurer presenting a proof of loss claim form, or upon the request of a tow truck operator possessing a notice of right of possession for salvage form, a VSF shall provide a legible copy of the tow ticket created by the towing operator responsible for towing the vehicle to the VSF to either:
(A) the insurer, within three business days of the insurer presenting the proof of loss claim form; or
(B) the tow truck operator, at the time the tow truck operator presents a copy of the notice of right to possession for salvage form to the VSF.
(3) The VSF may provide the copy of the tow ticket to the insurer, via regular mail, facsimile, or by other electronic means, provided the insurer provides the VSF with a specific mailing address, facsimile phone number, web address or email address to which to send the tow ticket.
(d) A VSF may not request a vehicle owner or operator to sign an authorization form for a tow, repair or any other service if the storage of the vehicle is the result of a tow initiated by law enforcement.
 
Texas Property Code Sec. 70.004.  POSSESSION OF MOTOR VEHICLE, MOTORBOAT, VESSEL, OR OUTBOARD MOTOR.  (a)  A holder of a lien under Section 70.003 on a motor vehicle, motorboat, vessel, or outboard motor who obtains possession of the motor vehicle, motorboat, vessel, or outboard motor under a state law or city ordinance shall give notice for a motor vehicle, motorboat, vessel, or outboard motor registered in this state to the last known registered owner and each lienholder of record not later than the fifth day after the day possession is obtained.  If the motor vehicle, motorboat, vessel, or outboard motor is registered outside this state, the notice shall be given to the last known registered owner and each lienholder of record not later than the 14th day after the day possession is obtained.
(b)  Except as provided by Subsection (c), the notice must be sent by certified mail with return receipt requested and must contain:
(1)  a request to remove the motor vehicle, motorboat, vessel, or outboard motor;
(2)  a request for payment;
(3)  the location of the motor vehicle, motorboat, vessel, or outboard motor;  and
(4)  the amount of accrued charges.
(c)  The notice may be given by publishing the notice once in a newspaper of general circulation in the county in which the motor vehicle, motorboat, vessel, or outboard motor is stored if:
(1)  the motor vehicle, motorboat, vessel, or outboard motor is registered in another state;
(2)  the holder of the lien submits a written request by certified mail, return receipt requested, to the governmental entity with which the motor vehicle, motorboat, vessel, or outboard motor is registered requesting information relating to the identity of the last known registered owner and any lienholder of record;
(3)  the holder of the lien:
(A)  is advised in writing by the governmental entity with which the motor vehicle, motorboat, vessel, or outboard motor is registered that the entity is unwilling or unable to provide information on the last known registered owner or any lienholder of record; or
(B)  does not receive a response from the governmental entity with which the motor vehicle, motorboat, vessel, or outboard motor is registered on or before the 21st day after the date the holder of the lien submits a request under Subdivision (2);
(4)  the identity of the last known registered owner cannot be determined;
(5)  the registration does not contain an address for the last known registered owner; and
(6)  the holder of the lien cannot determine the identities and addresses of the lienholders of record.
(d)  The holder of the lien is not required to publish notice under Subsection (c) if a correctly addressed notice is sent with sufficient postage under Subsection (b) and is returned as unclaimed or refused or with a notation that the addressee is unknown or has moved without leaving a forwarding address.
(e)  A person is entitled to fees for towing, impoundment, preservation, and notification and to reasonable storage fees for up to five days before the day that the notice is mailed or published, as applicable.  After the day that the notice is mailed or published, the person is entitled to reasonable storage, impoundment, and preservation fees until the motor vehicle, motorboat, vessel, or outboard motor is removed and accrued charges are paid.
(f)  A person charging fees under Subsection (e) commits an offense if the person charges a storage fee for a period of time not authorized by that subsection.  An offense under this subsection is punishable by a fine of not less than $200 nor more than $1,000.

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