How Can a Lienholder Obtain Release of a Vehicle That Is Subject to a Tow Lien Under Section 713.78, Florida Statutes?
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When towing companies tow vehicles in the State of Florida, Section 713.78 provides protection to ensure they are paid for their services. While the owner of the vehicle may not want to pay for the towing company’s 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 tow lien under Section 713.78.
What is a Tow Lien?
Section 713.78 provides a towing company (that meets the definition and requirements of the statute) to place a lien on a vehicle for a reasonable towing fee, a reasonable administrative fee and a reasonable storage fee. §713.78(2), Fla. Stat. The claim of lien is commonly referred to as a “tow lien.” The person who claims a tow lien must give notice by certified mail to the registered owner, the insurance company insuring the vehicle and all persons who claim a lien on the vehicle. §713.78(4). The tow lien must be provided within 7 business days after the date of storage of the vehicle. §713.78(4). Section 713.78(4)(c) identifies the specific information that must be contained in the tow lien notice. §713.78(4)(c). If a tow lien is not paid, then the person claiming the tow lien may sell the vehicle provided that the tow lien notice was not sent to the registered owner, insurance company or lienholder less than 30 days before the sale of the vehicle. §713.78(4)(d).
How to obtain release of a vehicle subject to a Tow Lien?
When a lienholder receives a tow lien notice, the lienholder may pay the amount set forth on the tow lien notice to obtain release of the vehicle. However, there may be a situation where the towing company refuses to accept payment from the lienholder, the towing company makes outrageous demands as a condition to release of a vehicle, or the towing company 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 towing company to release the vehicle.
If the vehicle was wrongly taken or withheld, a lienholder may file a lawsuit in the county court of the county where the vehicle is stored. §713.78(5)(b). However, that lawsuit must be filed within 10 days after the date that the lienholder has knowledge of the location of the vehicle. §713.78(5)(b).
Alternatively, the lienholder may post a bond in order to have the vehicle released. §713.78(5)(b). The lienholder may post either a cash or surety bond or other adequate security equal to the amount of the charges for towing or storage. §713.78(5)(b). The bond must be posted in the county where the vehicle is stored. Upon the posting of the bond, the clerk of the court must issue a certificate notifying the lienor of the posting of the bond and directing the lienor to release the vehicle. §713.78(5)(b). This is usually 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 towing company 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 towing company refuses to comply with the certificate of release, Section 713.78 provides for criminal penalties. §713.78(12).
Section 713.78 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 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.