How to Prepare a Mechanics Lien as an Auto Broker in New York: A Complete Guide
How to Prepare a Mechanics Lien as an Auto Broker in New York: A Complete Guide
Auto brokers in New York regularly deal with unpaid invoices, last-minute cancellations, and clients who refuse to reimburse expenses after you’ve already done the work. Whether you located a vehicle, negotiated a deal, arranged transportation, or advanced funds — unpaid balances can severely impact your business.
Fortunately, New York law offers a powerful remedy:
👉 The New York Mechanics Lien (also called a “Garagekeeper’s Lien”).
Auto brokers can legally place a lien on a vehicle to secure payment for services performed.
What Is a Mechanics Lien for Auto Brokers in New York?
Under New York Lien Law §184, anyone who provides labor, services, or storage related to a motor vehicle and has lawful possession of that vehicle may claim a lien for:
Brokerage fees
Transportation expenses
Storage charges
Inspection fees
Administrative or service costs
Unpaid invoices related to the acquisition, locating, or facilitating a vehicle sale
This kind of lien allows you to:
✔ Keep possession of the vehicle until paid
✔ Demand full payment
✔ Recover expenses through a statutory lien sale if necessary
This is one of the strongest legal protections available when clients refuse to pay.
When Can an Auto Broker File a Mechanics Lien in New York?
You may file a lien if:
You provided a service connected to a vehicle
You are owed money for that service
You have possession of the vehicle (this is critical in NY)
The owner refuses to pay or has disappeared
The vehicle benefited from your services
Common auto broker scenarios include:
A buyer refuses to pay after you secure a vehicle
A client won’t reimburse transportation or auction fees
A consignment customer refuses to pay your commission
You advanced funds and the customer vanished
A client disputes your invoice but leaves the vehicle in your possession
If you have possession and a valid service invoice, you likely qualify to file a lien.
Step-by-Step: How to Prepare a Mechanics Lien in New York (Auto Broker Edition)
Here is the exact process auto brokers follow in New York.
1. Gather All Documentation
Before filing, collect:
A detailed invoice
Brokerage agreement or service contract
Proof of services (emails, texts, photos, auction receipts, transport confirmations)
Vehicle information (VIN, plate, year, make, model)
Dates the vehicle entered your possession
New York liens must be supported with detailed documentation.
2. Confirm You Have Lawful Possession
New York requires possession for a valid mechanics lien.
You must physically hold the vehicle until your lien is paid or resolved.
If you release the vehicle before the lien process is complete, you lose your lien rights.
3. Determine Your Lien Amount
Include all legitimate charges:
Commission
Administrative fees
Auction fees
Storage charges (based on local regulations)
Diagnostic or service fees
Transportation costs
Ensure each charge is documented and reasonable.
4. Prepare a “Notice of Lien and Sale” (NY DMV Form MV-901)
This is the official New York form required to place a mechanics lien.
The MV-901 requires:
Lienholder (your business) name and address
Vehicle information
Owner and lienholder information
Description of services performed
Total amount owed
Date of possession
Statement of lien under NY Lien Law §184
This form is the foundation of your lien claim.
5. Mail Notices to All Required Parties
Within 5 business days, you must send a copy of the MV-901 to:
✔ The vehicle owner
✔ Any recorded lienholder (bank, leasing company, etc.)
✔ The New York DMV
Notices must be sent by certified mail with return receipt.
This proves you followed statutory law.
6. Wait for the Statutory Response Period
New York law gives:
The owner
Any lienholder
10 days to respond after receipt of your notice.
During this waiting period, the owner may:
Pay the invoice
Dispute the lien
Request the return of the vehicle (only after paying the balance)
If no valid objection is raised, your lien proceeds.
7. Conduct a Lien Sale (If Required)
If payment is not made within the waiting period:
You may proceed with a lien sale following DMV rules.
This includes:
Scheduling a public auction
Publishing notice in a local newspaper
Recording sale results with the DMV
Proceeds from the sale will:
First cover your lien amount
Then cover storage fees
Remaining funds (if any) go to the owner
You cannot keep surplus funds.
Why Mechanics Liens Work So Well for Auto Brokers in New York
Mechanics liens are effective because:
✔ They legally immobilize the vehicle
✔ They force non-paying clients to respond
✔ Vehicle owners typically cannot ignore certified notices
✔ You gain priority over many other creditors
✔ You can recover your fees without going to court
Most disputes end quickly once the customer receives the lien notice.
Avoid These Common Mistakes
Auto brokers often lose lien rights because of:
❌ Not having possession of the vehicle
❌ Sending notices late
❌ Using the wrong form
❌ Filing incomplete vehicle information
❌ Overcharging (NY law requires reasonable charges)
❌ Not sending certified mail
❌ Proceeding with a sale without DMV approval
Following proper procedure makes your lien enforceable and collectible.
Final Thoughts: New York Mechanics Liens Protect Auto Brokers
Unpaid invoices are a major issue for auto brokers, but New York’s mechanics lien laws give you powerful leverage. Filing a lien correctly allows you to:
✔ Recover unpaid commissions
✔ Secure your legal rights
✔ Pressure clients to pay promptly
✔ Execute a lien sale when necessary
If you operate as an auto broker in New York, understanding how to prepare a mechanics lien can significantly improve your cash flow and reduce bad debt.
Need Help Preparing a New York Mechanics Lien?
If you’re dealing with unpaid invoices and need help:
Preparing your MV-901
Calculating storage fees
Drafting lien notices
Filing with the DMV
Managing a lien sale
👉 Contact us — we help auto brokers file mechanics liens properly and recover unpaid money faster.