Vehicle Repair Shop Possessory Liens
Section 70.001(a) of the Texas Property Code provides that a motor vehicle repair shop is entitled to what is called a “possessory” lien for unpaid repairs to a motor vehicle. To qualify for this lien, the repairer must possess the vehicle at issue. This lien entitles the vehicle repair shop to retain possession of the vehicle until the amount due under the contract for repairs has been paid in full or, if no amount is specified in the contract, until the reasonable and usual compensation is paid.
Significant is the fact that no notice is required for this lien to arise. Possession of the vehicle and a failure to pay is sufficient to activate the lien. There are no notice requirements for the lien to arise, not even to a lien-holding lender. However, if repair services were rendered and remain unpaid and the vehicle repair shop still possesses the vehicle, the vehicle may be sold as long as the specific notice is provided to those having an interest in the vehicle, including lien-holders, consistent with Section 70.006. The vehicle may be sold and the proceeds applied to pay the repair costs and any storage fees, then to the lien-holder, and any net proceeds should be returned to the vehicle owner.