MECHANIC’S LIEN FORECLOSURE
Mechanic’s Lien Foreclosure Procedures
GENERAL INFORMATION – A copy of the signed work order must be submitted. In addition, a determination must be made as to where the vehicle was last registered. Ownership can only be obtained through a court order if a signed work order is unavailable or no determination can be made as to where the vehicle was last registered.
FORECLOSURE NOTICE – Not later than 30 days after the day on which charges accrue, the mechanic/garage must notify the owner(s) and lienholder(s) of record by certified mail, return receipt requested, of the charges due and request payment. Notice by newspaper publication may be permitted (see “Notification by Newspaper” below). Not later than 30 days after the day on which charges accrue, the mechanic/garage must submit a copy of the notice (made to the owner(s) and lienholder(s)), a copy of the signed work order, and a $25 administrative fee to the county tax assessor-collector’s office in the county in which the repairs were made. The mechanic must include in the notice the physical address where the repairs were made, the legal name of the mechanic/garage, the taxpayer or employer identification number of the mechanic/garage, and a copy of the signed work order authorizing repairs. NOTE: The notice must also be sent to the address that appears on the work order/document authorizing possession if the addresses are different from the address on the motor vehicle record.
STORAGE NOTICE, IF APPLICABLE – If any amount of the charges include storage fees, a second notification is required. Refer to Storage Lien Foreclosure, Form VTR-265-S, for additional notification requirements when storage fees are included. Form VTR-265-S must be submitted if storage fees are included. Additionally, a release of lien (if applicable) is required; otherwise, foreclosure must be through a court of competent jurisdiction.
PUBLIC SALE – If charges are not paid before the 31st day after the day the notice was mailed or published, the mechanic/garage may sell the vehicle at public sale without obtaining a release of lien. The proceeds shall be applied to the payment of charges, and the balance shall be paid to the person entitled to them.
APPLICATION FOR TITLE – The highest bidder at public sale must apply for title, unless the vehicle is purchased by a dealer with a current General Distinguishing Number (GDN).
NOTIFICATION BY NEWSPAPER – In lieu of written notification, publication of the notice(s) in a newspaper of general circulation in the county in which the vehicle is stored may be used only if ALL of the following apply: (1) The mechanic/garage submits a written request by certified mail, return receipt requested, to the governmental entity with which the motor vehicle is registered requesting information relating to the identity of the last known registered owner(s) and any lienholder(s) of record. (2) The mechanic/garage: (a) is advised in writing by the governmental entity with which the motor vehicle is registered that the entity is unwilling or unable to provide information on the last known registered owner or any lienholder of record, or (b) does not receive a response from the governmental entity with which the motor vehicle is registered on or before the 21st day after the date the holder of the lien submits a request under (1). (3) The identity of the last known registered owner cannot be determined. (4) The registration does not contain an address for the last known registered owner. (5) The mechanic/garage cannot determine the identities and addresses of the lienholders of record. NOTE: The mechanic/garage is not required to publish notice if a correctly addressed notice is sent with sufficient postage and is returned as unclaimed, refused, the forwarding order has expired, or with a notation that the addressee is unknown or has moved without leaving a forwarding address.
Evidence Required to Transfer Ownership
a. Form 130-U – Application for Texas Title. b. Form VTR-265-M – Mechanic’s Lien Foreclosure. c. Verification of Title and Registration – If the vehicle is registered in Texas, verification of Texas title and registration is required. If registered outside of Texas, verification of title and registration from the state of record, if available. A third party verification is not acceptable. If not available, the following may be provided in lieu of title and registration verification from the state of record: (1) If a mechanic/garage sends a request for title and registration verification to the state of record (by certified mail) and is informed by letter that due to the Driver’s Privacy Protection Act restrictions the state will forward the mechanic’s notification to the owner(s) for notification purposes, then the original letter(s) from the state of record and certified receipts for each notification sent to that state will be acceptable, or (2) If notification is made by newspaper publication, proof that a correctly addressed request for the name and address of the last known registered owner(s) and lienholder(s) was sent to the state of record by certified mail with return receipt requested. Proof consists of a copy of the request and certified receipts for the notification sent to the state of record. d. Proof of Notifications Notices by Certified Mail – Proof consists of the date stamped receipts for certified mail and return receipt, including any unopened certified letter(s) returned as undeliverable, unclaimed, refused, or no forwarding address. Notice by Newspaper Publication (only if applicable) – Proof consists of the certified request (as listed above for certified mail) sent to the state of record requesting verification of owner(s) and lienholder(s) AND a legible photocopy of the newspaper publication including the name and date of the publication. Receipt from County Tax Assessor-Collector – Dated receipt showing $25 administrative fee was paid. This confirms filing with the county tax assessor-collector’s office. e. Liability Insurance – A copy of current proof of liability insurance in the applicant’s name. f. Work Order – Attach a copy of the signed work order. g. Out-of-State Vehicles – An Out-of-State Identification Certificate, Form VI-30, or a Texas Vehicle Inspection Report (acceptable) after March 1, 2015) and a certified weight certificate if the vehicle is a commercial vehicle.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.