Definition
A mechanic’s lien is a claim to property, such as a vehicle, placed by the mechanic due to nonpayment of agreed upon repair services.
Analysis
A mechanic’s lien actually refers to a number of different categories of liens. These can include upgrades to real property, such as construction liens, artisan liens or even supplier liens. Such liens must be repaid if the owner wants to be able to sell the property.
In the context of consumer credit, a mechanic’s lien is most commonly used to for unpaid vehicle repairs. A mechanic’s lien is often placed as a last resort by a repair shop on a vehicle in which the owner fails to pay the repair bill. The owner may be unable or unwilling to pay.
If the owner does not pay the repair bill within a specified period of time, the repair shop may sell the vehicle to repay the repair fees as well as any storage fees. This is subject to provisions of state law, which may place additional restrictions on the process in certain states.
