If you rent or own a storage facility to store your customers’ vehicles, you may have an opportunity to recoup some of your expenses with a storage lien. With a storage lien, you can recover the costs of storing a vehicle if the owner does not pay for the services within a certain time period. This helps incentivize owners to pay promptly and lower your chances of becoming stuck with the bill if they don’t. In this post, we’ll go over everything you need to know about how to file a storage lien for vehicles so that you can begin establishing your own policies and procedures immediately. Read on to learn more!
What is a Storage Lien?
A storage lien is a legal claim on a vehicle that’s in storage. It allows the person storing the vehicle (usually the owner or operator of a car storage facility) to recover their expenses if the vehicle owner does not pay a certain amount of money (usually the amount owed for storage services) within a certain amount of time. You’re allowed to file a storage lien against a vehicle if the owner of the vehicle has failed to pay the amount due for storage services within 30 days. If the vehicle owner fails to pay the amount due for 60 days, you can file a claim of lien against his or her vehicle with the county clerk’s office. This makes it easier for you to recoup the money you’re owed, but it also gives the vehicle owner ample opportunity to dispute the claim and get it dismissed.
When Can You File a Storage Lien?
You can only file a storage lien against a vehicle if all of the following are true:
- The owner of the vehicle has failed to pay the amount due for storage services within 30 days.
- The vehicle has been in your possession for at least 15 days.
- The vehicle is currently in your possession.
How to File a Storage Lien
Here’s what you’ll need to do to file a storage lien against a vehicle: – Mark the vehicle as “stored.” This will allow you to keep track of the date that the vehicle first came into your possession, which you’ll need to do to make sure that the vehicle is in your possession for at least 15 days.
- Make a written demand for payment. You’ll need to send a written demand for payment to the owner of the vehicle. This should include the amount owed, the date by which the owner needs to pay, how you want the owner to pay (online payment, check, money order, etc.), and your contact information.
- Wait 15 days. After the 15 days elapse, you can file a lien against the vehicle. – Once the lien is filed, wait five business days. After the five days elapse, the lien will become a public record and is likely to appear in search engine results.
- Wait for the owner to pay. After the lien is filed, it may take several months for the owner to pay it off. If the owner does not pay it off within six months, you can have the vehicle towed and sold at auction.
Important Things to Remember
Here are a few things to keep in mind while filing a storage lien against a vehicle:
- Make sure to keep detailed records of all of the expenses related to the vehicle. This will make it much easier to prove that you’re owed the amount that you’re asking for.
- By law, you must wait 15 days before filing a storage lien against a vehicle. This is to give the owner ample time to pay the amount due for storage services. It will also give you ample time to file a lien, so you don’t have to rush the process.
- You must wait five business days after filing a lien before the lien becomes a public record. This will give the owner ample time to dispute the lien and get it removed from public records.
- If the vehicle owner does not dispute or pay the amount due for storage services within 90 days, you can have the vehicle towed and sold at auction.
The process of filing a storage lien is a great way to protect yourself against customers who don’t pay promptly. It’s important to note that even though you can file a storage lien after the vehicle has been in your possession for 15 days, you should send the owner of the vehicle a written demand for payment as soon as you take the vehicle into storage. This gives the owner ample time to pay the amount owed before you file a lien. The best way to protect yourself when storing vehicles for customers is to make sure that you get everything in writing. Have the customer sign a contract that states that they are responsible for paying for the storage fees if they don’t pay within a certain amount of time. For more information, reach out to your state’s or local government authority to find out what the laws are in your jurisdiction.