Ask the County Law Librarian – Lien Sale for Auto Repairs
Q: I own an auto shop and I finished about $5500.00 in repairs on a car and now the owner doesn’t want to pay me. The car has been sitting in my shop for months now, how can I get rid of the car and get the money that is owed to me?
A: This happens quite often especially when the cost of repairs far exceed the value of the vehicle. You will be happy to hear that if a person has repaired, furnished supplies/materials for, or towed or stored a vehicle and has not been paid for the services rendered, that person has a lien against the vehicle. The lien arises or becomes effective at the time the registered owner is presented with a written statement of charges for completed work or services. The legal owner must be notified before the service is performed if the amount of any repairs or service will exceed $1,500. The lien may be satisfied by getting a court judgment or by selling the vehicle through a lien sale process outlined in the California Civil Code §3072. In order to conduct a lien sale, the person/lien holder must have possession of the vehicle. The California Department of Motor Vehicles website provides a detailed summary of the procedures involved. The following are some main points to consider.
Determine the current market value of the vehicle
Before conducting a lien sale, you must first determine the value of the vehicle, since which procedure you use will depend on the value of the vehicle. According to the California Civil Code §3072, if the vehicle’s value is $4,000 or less, you will need to notify the registered and legal owners of record of the lien sale and follow the process outlined below, but if the vehicle’s value is greater than $4,000, see the DMV brochure HTVR 8, “How To: Conduct a Lien Sale for a Vehicle Stored at a Self-Service Storage Facility or Valued Over $4,000".
Locate the vehicle’s owner
There are several steps that you will need to go through before conducting the lien sale. The first step will be to locate the vehicle’s owner. Within 15 days of the date the lien sale arises, complete a Registration Information Request for Lien Sale (INF 1126) form and submit it to DMV. The DMV will provide a vehicle history record with the registered and legal owner(s) of record and known interested parties. Owners identified from incomplete transfers are included as interested parties.
Starting the sale process
Once you are given the go ahead for the lien sale, at least 31 days, but no more than 41 days before the sale date, not counting the day the notice is mailed, send a Notice of Pending Lien Sale for Vehicle Valued $4,000 or Less (REG 668) by certified mail to the registered owners, legal owners, and any known interested parties and enclose a return envelope pre-addressed to DMV. If DMV has no record of this vehicle, you need to send only a notice to each interested party known to you and one to the DMV.
Posting the sale notice
At least 10 days prior to, and including the sale date, the REG 668 form must be posted in a conspicuous place at your business office. If the sale occurs at a place other than your business office, a REG 668 must be posted at the sale site. When posting the REG 668, fold the document so the registered owner, legal owner, and interested party addresses are not visible. If there is an opposition to the lien sale, the sale may be halted by the DMV unless you are able to provide additional documents. For more information on responding to an opposition, visit the DMV website. After receiving the documents, DMV will send a letter allowing the sale to continue.
Day of lien sale
On the sale date, the vehicle must be available for inspection at least one hour prior to the sale. A lien sale is a public auction. Anyone may appear and bid. Sealed bids are not allowed.
If you are able to successfully sell the car, complete the Certification of Lien Sale for Vehicle Valued $4,000 or Less (REG 168A) and give it to the buyer along with the DMV vehicle record history information and any postal receipts you have. If excess money is received from the sale of the vehicle, within five days of the sale date, make a copy of the REG 168A form and mail it along with the excess money to the Lien Sales Unit at the address shown on the REG 168A. Be sure to remove and destroy the license plates on the vehicle. Also within five days, submit Notice of Transfer and Release of Liability (NRL) (REG 138) to DMV. You may also file a NRL by using DMV’s new, online, NRL Filing Service.
On the other hand, if no one places a qualifying bid, complete the Certification of Lien Sale for Vehicle Valued $4,000 or Less (REG 168A) showing you as both the buyer and seller. Be sure to remove and destroy the license plates on the vehicle. Within five days, submit Notice of Transfer and Release of Liability (NRL) (REG 138) to DMV. You may also file a NRL by using DMV’s new, online, NRL Filing Service. If you end up selling the vehicle later, you are required to give the new buyer a bill of sale with the lien sale documents. For more information on registering the vehicle after the lien sale, visit the DMV website.
Disputes between a lien holder and an interested party, including the registered owner or legal owner on the vehicle history records, are a civil matter that can only be decided in court and do not involve DMV. The DMV can assist a lien holder by providing the names and addresses of the registered owner, legal owner, and interested parties from their vehicle history records.
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