Repair &  Storage Lien

Repair and storage liens (previously called “mechanics liens”€�) are governed by the Repair and Storage Liens Act. The Act provides a complete  mechanism for dispute resolution, but contains many technical rules. The lien holder must follow these rules precisely in notifying the owner of the liened property in order to redeem, sell or retain the property.  The property can be almost anything (watch, car, airplane) but does not  include realty or fixtures.

Generally, this Act provides that if a repairer or storer has not been paid, it  obtains a lien in the property repaired or stored. The lien creates a  claim that is greater than that of the owner, and even over a leasing  company who may have a registration under the Personal Property Security Act (PPSA).

There are two kinds of liens:

• Possessory Liens: the repairer or storer is refusing to release the property until its  bill is paid. This lien may be registered or unregistered.
   
• Non-possessory Liens: the repairer or storer lets the owner take the property without paying  the bill in full, but registers a lien. This lien must be registered in  order to ensure its priority. The repairer or storer can repossess the  property at a future date without notice.

As the owner of the property, or anyone with a PPSA interest, this Act is  particularly disturbing; the person bringing the property for storage or repair may not be the owner or PPSA registrant. If the person bringing  in the property has the authority of the owner, the lien is validly  created. For example, an individual might lease a vehicle and then bring that vehicle to a garage for repairs. The individual did not need the  leasing company’s permission to bring the vehicle to the garage for  repairs. When the individual refuses to pay, the garage will look to the leasing company to pay the bill. The garage may try to sell the  property to pay its bill; the leasing company gets paid after the garage and may receive substantially less than the value of the vehicle.

In any repair and storage lien matter, time is of the essence. Owners and  PPSA registrants must act quickly to prevent the accrual of storage fees and to safely retrieve the article before any damage can be done.

Wolfson Law Professional Corporation
Barristers & Solicitors
2345 Yonge Street, Suite 912
Toronto, ON, Canada  M4P 2E5
Tel: 416.730.1640
Fax: 416.730.0599

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