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Using a Lien on a Motor Vehicle

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Recently we had a client ring with an interesting question which I would like to share. This client runs an engineering company and had done some modifications on a vehicle. The customer had some issues with the modifications.

The client rectified these immediately then had the changes approved by the licencing department. Our client made these changes at their cost, however, the customer had made further request for additional work to be done on the car that were not part of the original design issues.

When the work had all been completed the client sent the bill for the additional work and his customer has now refused to pay, stating that the agreement was that the client would rectify the issue at their own costs.

They are now in dispute over the additional work and costs. Lucky for our client the vehicle is still in his possession and our suggestion was they enforce a repairer’s lien on the vehicle. A repairer’s lien entitles you to keep possession of the vehicle until the debt is paid, a lien can only arise if work is done on the vehicle and is in the repairer’s possession.

There are some important factors involved in enforcing a lien.

1. You must have acquired possession of the vehicle with the owner’s permission

2. Lien can only exist for the work that has been performed on the vehicle at that time

3. If the vehicle leaves your possession you lose the authority to enforce the lien

4. If the vehicle is subject to a finance agreement the contract may inhibit the enforcement of a lien.

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