RD688 - Virginia Department of Motor Vehicles Mechanic’s and Storage Lien Study Report – December 2019

  • Published: 2019
  • Author: Department of Motor Vehicles
  • Enabling Authority: Request of the House of Delegates (2019)

Executive Summary:

Sections §§ 46.2-1200 through 46.2-1207 of the Code of Virginia designate the current abandoned vehicle process (AVP) for applicants to dispose of an abandoned motor vehicle, trailer, or manufactured home left on a Virginia highway, public property, or private property. That process also applies to unattended and immobile vehicles, generally, by §§ 46.2-1209 through 46.2-1215 of the Code of Virginia. The abandoned vehicle process is required to be used by anyone in possession of an abandoned vehicle. The Department of Motor Vehicles (DMV) allows individuals, businesses, and government agencies or their authorized agents to use the AVP.

Sections § 46.2-644.01 and 46.2-644.02 of the Code of Virginia create statutory liens for persons who tow, store, or repair motor vehicles to enable those persons to recover costs or other charges owed when the owners of the vehicles fail to pay within a reasonable timeframe. Storage liens, which apply to anyone who stores a motor vehicle, are established in § 46.2-644.01 of the Code of Virginia. Mechanics’ liens, for those who perform work on a motor vehicle, are found in § 46.2-644.02 of the Code of Virginia. Both liens are enforced through the provisions of § 46.2-644.03 of the Code of Virginia, which also permits tow companies, which recover unattended or immobilized vehicles at the direction of localities, to use the mechanic’s and storage lien (MSL) process if the vehicles have not been disposed of through the AVP or another statutorily-authorized procedure.

DMV was charged by the Chairmen of the Senate and House Transportation Committees to convene a stakeholder group to examine issues surrounding abandoned vehicles and vehicles subject to MSL. The issues raised have included: difficulties complying with notice, posting, and Servicemembers Civil Relief Act (SCRA) requirements; confusion between the different processes legislated for abandoned vehicles and MSL, and when they may be used; lack of options to facilitate compliance with other states’ requirements, when necessary; and the lack of adequate statutory authority or direction for some practices, especially those of towing companies (Appendix A).

The stakeholders include representatives from the towing industry, the vehicle data industry, the insurance industry, the banking industry, the vehicle dealer industry, the vehicle storage industry, law enforcement, and other relevant stakeholders as identified by DMV. In March, DMV assembled an internal working group to begin reviewing the issues surrounding the concerns raised in the charge letter issued by the Transportation Committee’s Chairmen. The team began:

• Reviewing concerns regarding the different processes legislated for abandoned vehicles and vehicles subject to mechanics’ and storage liens and when they can be used;

• Reviewing options to comply with other states’ requirements;

• Reviewing concerns regarding the difficulties complying with notices, postings and the requirements of SCRA;

• Identifying changes for adequate statutory authority or direction for some practices;

• Streamlining and increasing compliance with Virginia’s current requirements and processes; and

• Identifying processes or legislation needed to ensure compliance with notification requirements in Virginia law and other jurisdictions’ laws.

After three meetings and a conference call, the stakeholders agreed that, in order to ensure a thorough review of the abandoned vehicles and MSL processes, the study needs to be extended into 2020, with a full report submitted to the House and Senate Transportation Committees in December 2020.