Chapter 3: Statutory liens on personal property Flashcards
What are STRS liens?
Liens w/ priority over other security interests (whether perfected or not)
Items must be in their possession
STRS liens: storage, towing, repair, or other services to PP (other than motor vehicles or aircraft)
Lien secures the lesser of: the reasonable charges for services or materials; the K price; or $100 if the lienholder is dealing w/ a legal possessor who doesn’t OWN the property.
Animal boarding: lien on animal for boarding charges
MV: STRS on MV have a lien on the vehicle for reasonable charges of the services rendered
Textile liens: secures payment for unpaid K prices for people who improve textiles
Liens for molds: must be a writing acknowledging a lien and the potential amount of the lien
Liens w/ priority below perfected security interests
Hotel/Boarding House liens: lien on personal property for reasonable charges for room and board
Commercial Landlord liens: lien on tenant’s furniture, fixtures, equipment and PP if: T has been gone 21 days after rent period expired; property remains on premises; L has lawful claim for damages; and there is no agreement between L and T to the contrary.
Lien is for rent + up to 60 days rent, damage and reasonable expenses of the sale.
After 21 days, L may remove T property and place it in storage. If property less than $100, L can treat it as abandoned after 5 days and donate.
Lawyer-tenant exception, if lawyer, L must contact NC state bar for instructions on sensitive information. Confidential prop not subject to lien.
How do you terminate a lien on personal property?
If C/lienholder voluntarily relinquishes possession, lien is terminated. It remains terminated even if reclaimed by LH.
NC case law on bad check to mechanic, not deemed voluntary relinquishment
Debtor can terminate by paying amount owed + reasonable storage/maintenance any time before property sold.
How do you enforce a lien?
LH can sell most prop if charges remain unpaid for 30 days
LH liens for towing and storage on MV can be enforced 10 days after debt matures
LH must give notice to owner and anyone else they dealt w/ of sale. Owner has 10 days to notify LH if they wish to contest or want a hearing.
Generally DMV manages this process for MV, LH can claim lien to DMV and they issue req notice and receive request for hearing, LH can also handle requirements personally by using approved form.
Requirements for a private sale
Private sales: commercially reasonable manner,
LH can’t purchase property,
Parties req. notice can req. public sale.
Private sale requires 30 days notice
Requirements for a public sale
Public sale: must be advertised by notice on county courthouse door, if property has a market value of $3,500 or more the notice must also be published in newspaper.
LH can purchase at public sale.
Notice: owner, person whom LH dealt, secured parties, other interested party and DMV if MV.
20 days for public sale.
What must notice include
Notice must include: LH name and address,
owners’ name,
name of the person who dealt w/ LH,
a description of the property,
lien amount,
place of sale.
Date on or after which sale will be made for private sale. For public sale, date and hour when sale will be held.
What are the damages fro failing to comply with sale procedures?
Damages for failing to comply w/ sale procedures
LH liable for $100, attny’s fees, and actual damages
Effects of a sale
Proceeds: (1) expenses, (2) lien, (3) surplus to entitled party.
A purchaser for value w/out notice of defects in sale takes free and clear over any interests over which the LH has priority
