Articles & White Papers
by James A. Castleman, Esq.
The garagekeeper lien has been covered by me in various columns many times. The garagekeeper lien is one of the most important tools that a body shop in Massachusetts has, to make sure it gets paid for the work it does. Basically, if a vehicle owner consents to a body shop performing work at an agreed upon price, then the shop is entitled to keep possession of the vehicle until it gets paid its proper charges. If payment is not made, then a ten day demand letter is sent to the vehicle owner, followed by a law suit that seeks an order of sale of the vehicle, the proceeds of which are used to pay the shop.
But, there is an entirely different class of liens on motor vehicles, that arise when a vehicle is involuntarily towed and stored without the consent of the owner. The rules for establishing and enforcing involuntarily tow liens are a bit more complex than for garagekeeper liens. That would seem to make sense, since they arise from services being performed without the owner’s consent. On the other hand, involuntarily tow liens often have advantages over garagekeeper liens, and many times do not require the tow operator or storage facility to bring a law suit in order to sell a car.
If you do involuntary towing as part of your business, then it is imperative you know how these liens work. Even if you do not do involuntary towing, however, it is important to understand these liens if you are a body shop, as you may well have to deal with tow companies when vehicles are eventually brought to your shop for repair, or when you end up storing a vehicle.
What Are Involuntary Tow Liens?
It is quite understandable that you would have a lien for work that you do on a car with a customer’s consent. But, how can you expect to get paid, and actually have a lien for services on a vehicle, when an owner has not consented, and even may have openly objected?
Statutes in Massachusetts give you the right to collect money and have a lien on an involuntarily towed vehicle primarily under two circumstances: First, you are given a lien for towing and storing a vehicle at the order of the police or other public authority, and, second, you are give a lien for towing vehicles that are trespassing on private property. A lien arises for police ordered tows, because the tow operator is performing a public service, furthering either enforcement of criminal or safety laws, or making roadways safe by removing problem vehicles. You are given a lien for “trespass tows” because you are enforcing a land owner’s rights against individuals who illegally trespass on their property.
Police and Public Authority Tow Liens. There are numerous statutes that give police or other public authorities the right to order the towing and storage of certain vehicles. Included are statutes that allow for towing of vehicles from accident scenes; towing of recovered stolen vehicles; towing of vehicles that are illegally parked or in violation of city or town ordinances; towing of abandoned vehicles; towing of vehicles that are blocking snow or ice removal from state highways; towing of vehicles that are blocking fire lanes; and towing of vehicles that are impounded by the police at the time of arresting the driver. This list is not exhaustive. A tow lien arises whenever towing and storage services are provided upon request by the police or by another “public authority” (e.g., a public works department, a municipal housing authority, etc.).
Trespass Tows The rules for “trespass tows” are somewhat more complex. Various requirements must be met in order to legally remove a vehicle that is wrongfully on private property.
First, the owner of the property must have forbidden the vehicle owner to park on that property. This can be done either by directly telling the vehicle operator not to park there, or, more commonly, by posting conspicuous notices on the property, warning people that it is illegal to park there and that their vehicles may be towed. Second, the property owner has to notify the police chief “or his designee” of their intention to tow a vehicle, before the vehicle is actually towed. Generally, the notice to the police chief must be in writing, and must include the address from which the vehicle is being removed, the address to which it is being taken for storage, the license plate number of the vehicle, the name of the owner of the property, and the name of the tow company removing the vehicle. Third, the owner of the property must have arranged to have the towed vehicle stored in a “convenient” location. This is to assure easy access for someone trying to retrieve their vehicle, upon payment of accrued costs.
Failure to follow any of the requirements for a trespass tow lien can be disastrous. In particular, no legally enforceable lien arises and the tow company is required to release the vehicle without getting paid anything from the vehicle owner. Further, the property and the tow company can be fined for illegally towing the vehicle.
Charges for Towing and Storage
At least theoretically, when you do work for a customer in a situation where a garagekeeper lien will arise, you can charge any amount that you want - as long as the customer agrees to the price. For involuntary tows, however, the vehicle owner is not agreeing to the tow and storage services you are providing, never mind agreeing to a price.
As a result, the maximum charges that you can make for these types of tows are set by the state. Governing statutes give the Department of Utilities the power to set maximum towing and storage rates for involuntary tows. The DPU does this by regulation.
Application of the towing and storage rates established by the DPU is somewhat complex, and the DPU’s regulation itself should be consulted in any given circumstance. The basic provisions of the current regulation are as follows, however:
A charge of $90.00 is allowed for towing any vehicle up to five miles. For tows over five miles, you can charge $3.00 per mile for passenger vehicles, and $4.25 per mile for commercial vehicles. Specific additional charges are allowed if additional services or labor are needed at the tow scene. Since March 7, 2008, a fuel surcharge, as set monthly by the DPU, may also be added.
Storage rates for involuntarily towed vehicles cannot exceed $35.00 per 24 hour period if the vehicle is stored in a lighted, outside storage facility, enclosed by a secure fence at least six feet high. Maximum rates for other outside storage cannot exceed $10.00 per 24 hour period. (The rate for outside secure storage was raised to $35.00 as of November 8, 2010; it had been $20.00 for several decades before that.)
Notably, there are certain circumstances under which more can be charged for storage. In particular, the statutory maximums apply to only non-commercial passenger vehicles that carry a maximum of nine people. The maximum rates also only apply to outside storage. There may be, however, particular circumstances that require inside storage. Although there are no set maximum storage charges when these exceptions apply, the governing statute still requires that your charges must be “proper”.
Enforcing Your Lien
For trespass tows, the enforcement procedures are very similar to the enforcement procedures for a garagekeeper lien. Enforcement of this lien does require a court order, and, generally, you will need an attorney to enforce your rights.
For a trespass tow, initially, you must send a demand for payment to the vehicle owner. While a vehicle owner in a garagekeeper situation has ten days to respond, a vehicle owner has sixty days to respond to a demand for payment on a trespass tow. If payment is not made within the sixty days, then you can bring a complaint in your local district or superior court, asking that the court order the vehicle be sold to satisfy the debt to you for your charges. As with the garagekeeper lien, you can then sell the vehicle, free of any finance company security interests in the car. Note that a court can award you your towing and storage charges, as well as your costs of the court action.
Although the time for enforcing involuntarily police or public authority ordered tow liens can be somewhat lengthy, there is an advantage, in that you do not have to bring a court action and do not need a lawyer to enforce your rights. To enforce a police or public authority tow lien, the procedure starts with getting the name of the registered vehicle owner. Statutes require that the police or public authority provide that information to you, either at the scene or “forthwith”. If they do not immediately give you this information, it is imperative that you follow through and obtain it from them.
Next you are required to send a notice to the vehicle owner by certified mail. The notice must tell the owner that the vehicle has been placed at your facility. It must also notify the owner of the tow charges and your storage rates. Finally, the notice must ask the vehicle owner whether he wants you to continue to hold the vehicle subject to those rates. The notice should be sent as soon as possible. And, if you are storing a recovered stolen vehicle, the notice to the owner is required to be sent by you within five days of recovering the vehicle or of learning of the owner’s name.
The requirement of asking the vehicle owner for your consent to continue to store the vehicle seems somewhat odd to me. I have never heard of an owner actually affirmatively consenting to continue the storage. I suppose that could occur if a vehicle has been towed from a scene of an accident, and the owner is waiting to settle his claim with his insurer. If a vehicle owner were to consent to continued storage, then the procedure for enforcement of the lien follows the same procedure as the enforcement of a garagekeeper lien. No further notices are required, but you do have to bring a court action to enforce your lien.
Assuming that the vehicle owner does not consent, or does not respond, to your first demand, if the vehicle is not claimed within sixty days then you are required to send a second notice to the owner. This notice must include your current towing and storage charges. You also must notify the owner that if the vehicle is not claimed within twenty-one days, then you will sell it.
If the vehicle is not claimed within twenty-one days, then you are required to publish notice of a sale for three consecutive weeks in a newspaper. There must be a date certain set for the sale. You are also required to notify your local police chief at least five days prior to the intended sale. You can do this by delivering a copy of the newspaper notice to the chief.
On the date chosen for the sale, you can sell the vehicle. This can either be by private sale or public auction. You are entitled to take all of your proper towing and storage charges from the sales price, as well as your costs of sending notices and conducting the sale. Most commonly, you will be the person buying the vehicle. If not, and you actually get more money than what your charges are, then you are required to send the balance of the sale proceeds to the owner with a statement of your charges, the amount received, and the net balance being sent to the owner. If you cannot find the owner, then you are required to pay the excess proceeds to the court.
In order to transfer title to a vehicle when an involuntary tow lien for a police or public authority is being enforced, you are required to give the purchaser a bill of sale, and to execute an Affidavit of Sale to be filed with the Registry of Motor Vehicles. As with trespass tows and other garagekeeper lien enforcement sales, the vehicle is sold of any finance company liens.
A garagekeeper lien for your charges which have been consented to by a customer is an important collection tool given for body shops. And, I find that most body shop owners have at least some knowledge of how the garagekeeper lien works. It may also be important for your business to know how involuntary tow liens arise and are enforced as well.
Author’s Plug: This article touches the basics of involuntary tow liens. A comprehensive Survey of Massachusetts Laws Affecting Motor Vehicle Carriers and Garagemen, recently updated and extensively edited by Attorney Castleman, is available for purchase from the Statewide Towing Association. The STA book covers involuntary tow liens in detail, as well as garagekeeper liens and many other topics that may be important to the operation of your business. The publication also includes all of the forms needed for enforcement of the various liens, and includes the forms in Word format on an accompanying disc. STA may be contacted at (508) 303-6699, or by e-mail at email@example.com.
James A. Castleman is a managing member of the law firm of Paster, Rice & Castleman, LLC, in Quincy, Massachusetts.