Garageman lien

Garageman’s Lien and How Do You Properly File One?

All too often, garage keepers face the repercussions of wrongly filing their liens. A Garageman’s Lien is a

type of lien that provides a security interest in a motor vehicle to someone who tows, stores, repairs, or

maintains it. The broader category of the garageman’s lien is the better-known mechanic’s lien. As an

extension of the mechanic’s lien, the garageman’s lien secures payment for work performed on

automobiles. Sections 184, 201, and 202 of New York’s Lien Law (“Lien Law”) specify the procedures to

properly file and foreclose a garageman’s lien. Basically, these laws require a garage keeper to notify the

owner of the vehicle, advertise the sale of the vehicle, and sell the vehicle at public auction. While

appearing simple, the intricacies of these requirements can create serious consequences for those who

fail to adhere to them. As an addendum to the Instructions and Requirements for Filing a Garageman’s

Lien offered by the New York State Department of Motor Vehicles, this article provides some tips to help

garage keepers avoid falling victim to the same mistakes many others have when filing their liens.

Helpful Tips

1. Agreement/Consent: A lien can either be created by agreement or statute. In the absence of consent

for repair charges and specific authorization for storage fee charges, a lien may be reduced or cancelled

completely. Also, if a garage keeper claims more than the amount that is actually or reasonably due, he

or she will be guilty of conversion and may be liable to the owner in damages.

2. Notice: If a garage keeper fails to provide the notice required under Lien Law § 184, the purported lien

is invalid. Additionally, under Lien Law § 201, before a sale is held a garage keeper must serve notice

upon the owner of the vehicle with due diligence. He or she must also serve similar notice in the same

way upon any person who has an interest in the property subject to the lien and upon any person who

has perfected a security interest in property.

3. Validity: If there is an existing vehicle owner, he or she will most likely challenge the validity of the lien

or the amounts purported to be owed under Lien Law § 201-a. The issue does not become moot simply

because the garage keeper has sold the subject property of the lien; the propriety of the sale itself

depends on the validity of the lien. Moreover, it does not bar an action of conversion. Therefore, if a

garage keeper wrongly sells the automobile, he or she may still be subject to an action under Lien Law §

201-a, as well as additional penalties.

4. Penalties: In New York State, the commissioner, or any person deputized by him, can suspend or

revoke the registration of any motor vehicle repair shop or refuse to issue a renewal thereof if he

determines that the owner:

a. has grossly overcharged on two or more occasions for repairs or adjustment within a two-year period;

b. has been guilty of fraud or fraudulent practices; or

c. has knowingly issued a false or misleading estimate.

-Note: this is not an exhaustive list.

In addition to or in lieu of revoking or suspending the certificate of registration of a registrant, a penalty for

a first violation may be ordered in a sum not exceeding $750 for each violation found to have been

committed. For a second or subsequent violation not arising out of the same incident both of which were

committed within a period of 30 months, a civil penalty of not more than $1,000 for each violation found

to have been committed may be ordered.

5. Exaggeration: Under Lien Law §§ 39 and 39-a, if the court finds that a garage keeper has willfully

exaggerated the amount claimed in the lien as stated in the notice of lien, the lien will be declared as void

and he or she will recover nothing. The garage keeper may also be liable in damages to the owner or

contractor. Damages can include the amount of any premium for a bond given to obtain the discharge of

the lien or the interest on any money deposited for the purpose of discharging the lien, reasonable

attorney's fees for services in securing the discharge of the lien, and an amount equal to the difference by

which the amount claimed exceeded the amount actually due.

Inclusion A garageman’s lien can be a useful tool for garage keepers seeking to get back what is rightfully

owed to them. However, remaining honest and precise is paramount, and falling short of such

responsibilities can create unfavorable results