How Can a Lienholder Obtain Release of a Vehicle That Is Subject to a Lien From a Motor Vehicle Repair Shop Under Section 559.917, Florida Statutes?
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When motor vehicle repair shops perform repairs to a vehicle, the Florida Statutes provide protection to ensure that the repair shop is paid for the services performed. While the owner of the vehicle may not want to pay for the services and may not want to retrieve the vehicle for whatever reason, lienholders may want to obtain and potentially sell the vehicle to satisfy, in whole or in part, their lien on the vehicle. This article focuses on the lienholder’s ability to obtain release of a vehicle that is subject to a claim of lien from a motor vehicle repair shop.
When does a motor vehicle repair shop have a possessory lien on a vehicle?
Chapter 559 of the Florida Statutes sets forth guidelines and requirements for the repair of motor vehicles. In short, after performing repairs, motor vehicle repair shops have the right to place a claim of lien on a vehicle to ensure the repair shop is paid for its work. Chapter 559 places specific requirements on motor vehicle repair shops, which such requirements are outside the scope of this article. However, it should be understood that repair shops have the ability to lien a vehicle and ultimately sell the vehicle to obtain payment.
How to obtain release of a vehicle subject to a claim of lien from a motor vehicle repair shop?
When a lienholder receives notice of a claim of lien from a motor vehicle repair shop, the lienholder may pay the amount due to obtain release of the vehicle. However, there may be a situation where the repair shop refuses to accept payment from the lienholder, the repair shop’s invoice is incorrect or includes work not completed, or the repair shop simply refuses to cooperate with the lienholder. When that happens, the lienholder must act quickly to preserve its lien on the vehicle and force the repair shop to release the vehicle. Section 559.917 sets forth the process for which a lienholder must follow to obtain release of a repair shop’s lien on the vehicle.
Section 559.917(1)(a) provides that a lienholder may obtain release of the vehicle from a claim of lien by filing a cash or surety bond with the clerk of the court in the circuit in which the disputed transaction occurred. §559.917(1)(a). If the lienholder posts a surety bond, the bond must be payable to the person claiming the lien and conditioned for the payment of any judgment which may be entered on the lien. §559.917(1)(a). The bond must be in the amount stated on the repair shop’s invoice, plus accrued storage charges, if any, less any amount paid to the repair shop as indicated on the invoice. §559.917(1)(a). Once the cash or surety bond is posted, the clerk of the court must automatically issue a certificate notifying the repair shop of the posting of the bond and directing the repair shop to release the vehicle. §559.917(1)(a). This certificate is commonly referred to as a “certificate of release.”
Once the lienholder obtains the certificate of release from the clerk’s office, the lienholder or its repossession agent should take the certificate of release to the repair shop in exchange for release/possession of the vehicle. It is highly recommended that the lienholder or repossession agent have the local police/sheriff present during the time of repossession of the vehicle. To the extent the repair shop refuses to comply with the certificate of release, Section 559.917 provides for both civil remedies and criminal penalties. §559.917(2)&(3).
It is important to note that once the bond is posted with the clerk, the repair shop has 60 days to file suit to recover on the bond. §559.917(1)(b). If the repair shop fails to file suit within 60 days after the posting of such bond, the bond shall be discharged by the clerk back to the lienholder. §559.917(1)(b).
Chapter 559 is a lengthy statute and should be examined in its entirety depending on the circumstances of the particular situation. However, it is important for lenders and lienholders to understand their rights and understand that they have the ability to obtain release of a vehicle from a repair shop in order to preserve their lien rights on the vehicle.
About the Author: Austin T. Hamilton, Esq. is board certified in business litigation by the Florida Bar and practices in the firm’s banking and financial services industry team.