Garageman lien

Understanding New York State Lien Law for Garages: Ensuring Compliance and Recovering Costs

New York State Lien Law (Sections 184, 201, and 202) outlines the procedure for foreclosing on a garageman's lien for eligible companies that tow, repair, or store vehicles. A garageman's lien, also more broadly known as a mechanic’s lien, is used to compel the owner to settle their debt by permitting a garage to retain possession of a vehicle until the owner pays for services rendered. If the owner fails to pay, the garage may sell the vehicle at a public auction to recover the costs.

Requirements for a Garageman’s Lien in New York State

To apply for a garageman’s lien in New York, businesses must meet detailed requirements, including having an appropriate NY state business license. Maintaining continuous possession of the vehicle at the garage is also a requirement that, if not met, will compromise your ability to apply a lien.

Steps to Foreclose on a Garageman’s Lien

The basic steps to foreclose on a garageman’s lien include:

1. Notifying the vehicle owner and any lienholders

2. Advertising the lien sale in a county newspaper

3. Conducting a public auction of the vehicle

4. Resolving the debt through settlement with the owner/lienholder, sale at public auction, or transferring ownership of the vehicle to the garage**

While these general steps might seem straightforward, the actual steps required are very detailed and specific and can have consequences if not followed precisely.

Challenges and Legal Considerations

Finance companies with interests in the vehicle are often compelled by a garageman’s lien to settle outstanding debts directly with the garageman. If a settlement cannot be reached, the finance company might hire an attorney to challenge the lien's validity. In such cases, the garage would be advised to seek legal representation to defend the lien.

Leveraging Professional Assistance

To meet their requirements, garages often hire a lien processing company like LIEN ONIT, which expertly manages the timing and detailed documentation necessary for the lien application process

If you have questions about leveraging NYS Lien law to compel non-paying customers to settle their debts, contact the lien experts at LIEN ONIT at 212-653-0136 or visit their website at www.lienonit.com 

Important Disclaimer

The information provided here is for general informational purposes only and should not be construed as legal advice. For any legal questions or concerns, please consult a qualified attorney.