Leasing companies can save a lot of money by contesting this common garage lien swindle

In New York, leasing companies cannot be made to pay garage lien charges unless they specifically agree to do so. Nevertheless, garages frequently assert liens against leased vehicles hoping that the leasing company is unaware of the law and will just capitulate to the garage’s demand. Leasing companies that identify this swindle can block it, recalling a famous advertising slogan: With Just a 5-minute call, you could save 95-100% on the cost to recover your vehicle from a bogus garage Lien claim!

In a recent case a NY garage served our leasing company client with a Notice of Lien and Sale alleging a garageman’s lien for $7,000 in repairs and another $8,000 in storage fees. Basically, the garage demanded that our client pay them $15,000 to release the car or the garage would invoke the power of the NYS DMV under Lien Law Sections 184 and 201 and take title to the vehicle.

Through discovery and independent investigation, we learned that the garage had never actually performed any of the repairs alleged in the lien sale notice and the documentation provided was no more than an insurance estimate. In short, the entire claim was a swindle.

After we filed suit to knock out the bogus lien, the Court held that a garageman’s lien could not arise unless the owner of the vehicle (the leasing company) consented to the repair and storage charges which did not happen.  The Court found that the lessee could not create a lien in a vehicle that the lessee did not own.  The entire garage lien was dismissed, saving the leasing company $15,000.

To sum it up, we were able to get a Court order cancelling the entire purported lien and were able to redeem and recover the vehicle for our client with no charges paid to the garage. In fact, the garage may still be on the hook for all of our client’s attorneys’ fees based upon the garage’s conversion of the vehicle.

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