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Auto Repair Shop's Rights and Process to Sell Customer Vehicles

Posted by attorney Brian Erikson
Filed under: Car repairs

A repair shop’s rights to a lien on such cars and to sell them are set out in Texas Property Code sections 70.001, et seq., and Texas Business & Commerce Code sections 9.609, et seq. The process to perfect the right to sell the cars requires notice to the persons with an interest in the cars (typically, the titled owner and lender of record). The repair shop should first prepare and file a UCC-1 financing statement with the Texas Secretary of State to reflect the debt owed for the repair and storage of the car.

The statutes discussed above set out a process of notification and sale of the cars. If the repair shop has properly complied, the seller can prepare a transfer statement which the buyer can use to apply to the Texas Department of Motor Vehicles for a new title. Under the Business & Commerce Code provisions (set out above), the DMV has to recognize a proper transfer statement.

The more information that you have concerning the cars and the persons or entities with an interest in the cars, the less expensive it will be to research the interested persons who need to be notified.

To undertake the process, you would need the following:

  1. Whatever you can find about the persons/entities with an interest in the cars.

  2. The vehicle identification numbers, as well as the vehicle year, make, model, license plate number.

  3. The amount of the unpaid repair invoices.

  4. A copy of the unpaid repair invoices.

  5. The terms of the repair engagement (interest or storage or whatever additional charges have accrued).

  6. Whatever information/documentation you have concerning efforts to contact the persons with an interest in the cars.

The steps that an attorney would take include:

  1. Prepare and file a UCC-1 financing statement to reflect the outstanding repair and storage charges.

  2. Apply for a certified copy of the title.

  3. Prepare and mail out notices to the persons interested in the cars.

  4. Assist with the public sale of the cars.

  5. Prepare a transfer statement for the buyer of the cars at the public sale.

If you need help, please contact me.

Good luck.

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