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Vehicle Repair Shop Lien in Texas

Posted by attorney Brian Erikson

A motor vehicle repairer has a "possessory lien" under Texas Property Code section 70.001(a). To qualify for the "possessory lien" the repairer must possess the vehicle. There are other provisions in section 70.001(c) that would apply where the repairer has released the vehicle. But where the repairer still possesses the vehicles, the repairer need not be concerned with the repossession provisions of section 70.001(c).

The possessory lien granted under section 70.001(a) allows the repairer to retain possession of the vehicle until the amount due under the contract for repairs is paid or if no amount is specified by contract, until the reasonable and usual compensation is paid.

There are no notice provisions required to perfect this possessory lien – simple possession perfects the lien.

The garageman with whom a motor vehicle is left for care has a lien on the vehicle under section 70.003(c) for the amount of the charges for the care, including reasonable towing charges, but excluding repair charges (which are covered under section 70.001(a) discussed above).

The notice provisions of section 70.004 do not apply where the repairer did not obtain possession of the vehicles "under a state law or city ordinance." Section 70.004's notice requirements appear to apply where, for example, a vehicle was impounded or towed for a parking violation.

Section 70.006 applies to the sale of the vehicle, and the notices required to give right to the sale. As noted above, the repairer does not need to provide notice to perfect its possessory lien, not even to the lien-holding lender. The statutory notice is required before the repairer can exercise its non-judicial rights to foreclose on the collateral. See, e.g., First State Bank of Odessa, N.A. v. Arsiaga, 804 S.W.2d 343 (Tex.App. – Eastland 1991, writ denied)(possibility that repairer would remain silent about accruing storage charges until charges exceeded the value of the collateral did not invalidate the repairer’s possessory lien).

The specifics of the notices that the repairer must provide to the titled owner and any lienholding lenders before selling the vehicle are set out in section 70.006.

For any proceeds in excess of the repairer’s charges, section 70.007 requires that the excess be paid to the person entitled to payment or if unknown then to the county treasurer.

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