Tips for Dealing with Bogus Mechanics's Liens

The State of Texas allows for the acquisition of a mechanic's lien on a motor vehicle under Chapter 70 of the Property Code when a worker repairs a vehicle and is not compensated for their labor. However, not all mechanic's liens are created equal nor filed in good faith. In fact, not too long ago bogus liens were a large problem for Texas dealers. In 2009 TIADA was able to help with the passing of SB 543 in the Texas Legislature to address the growing problem of bogus mechanic's liens. SB 543 established additional requirements for those seeking a mechanic's lien. Prior to 2009 the total number of mechanic's liens was up to 17,502. After SB 543 passed, the total number of mechanic's liens dropped to 9,928. That being said, many dealers still face repair shops presenting bogus liens. 

Did the dealer receive notice? Not later than the 15th business day after the date the county tax assessor-collector receives the notice, the vehicle storage facility owner must provide notice to the owner / lienholder.  If a lien was filed, the county tax assessor-collector must also provide a copy of the notice to the owner of the motor vehicle and each holder of a lien recorded on the certificate of title of the vehicle. Did you receive timely notice within via certified mail as required by law? Check the charges and when those dates start.  Pro tip: Any public sale may not occur until “after the 31st day after notice is mailed to the owner(s)/lienholder(s).” 

Many times, as part of or attached to a mechanic's lien, a repair facility will present ambiguous (or completely fake) repair bills.  Itemized Repair Bill. Be suspicious of vague and general repair bills.  Look for actual parts, labor, descriptions of all actual work performed. Inspection? You are allowed to personally inspect the vehicle and related repairs. Have your mechanic review and inspect the repairs alleged to have been completed.  Can you see any new parts? Do they have the old parts available?  New parts should stand out from used parts or original equipment.   Location? Is it a recognized named brand repair facility or just a random garage? Has the mechanic even moved the vehicle?  Check your GPS logs.  Also, check the fluids. Were they replaced?  Check the belts and bolts.  Were they smudged, cleaned, or otherwise appear to have been worked on?  Document! Do you think you have been scammed?  Take pictures of everything and keep notes of everything?  GPS logs, receipts provided, notes of conversations, are there surveillance cameras at the shop?

I've been scammed, now what?  If they mechanic will not release the vehicle, you may file a writ of sequestration at a local court and have a sheriff or constable recover the vehicle and then hold a hearing on the veracity of the repairs and or whether all required notice was provided. If you believe the repairs were fake, you can sue the repair shop for fraud. It is also illegal to present a false or bogus lien in Texas.  A person may sue any mechanic who records a fraudulent lien for $10,000 in damages if the mechanic had “knowledge that the document or other record is a fraudulent court record or a fraudulent lien or claim against real or personal property or an interest in real or personal property.”  See Texas Civil Practice and Remedy Code 12.002.  It is recommended that you retain an attorney for such legal proceedings.



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