Mastering the Notice of Lien in 5 Easy Steps

March 30, 2021

Something shows up at your facility unexpectedly and you are asked if it can be stored with you on short notice. Trying to be fair and not wanting to turn down a customer, you oblige, and normal protocol goes out the window.

Whether it’s a tow-yard receiving a vehicle under impound, a marina or repair shop assisting someone who runs into mechanical trouble, or a warehouse helping out in a logistical pinch, this is something that happens to storage companies of all kinds.

Though most of these situations resolve themselves without issue, taking the following steps and making sure that a Notice of Lien is issued when necessary will ensure that you are protected in the event that things do go sideways.

1) Act fast!

Time is very much of the essence when it comes to this notice. Storers are required to issue a Notice of Lien when necessary within 60 days (and only 15 days for vehicles in Ontario) of the item(s) being deposited into storage.

Failing to do so will result in the storer being restricted to a maximum of those 60 days (or 15 days for vehicles in Ontario) worth of storage regardless of how long the item(s) go on to be stored for. Being owed a year or more worth of storage and finding out that you are only eligible to claim two months of it is something that we all want to avoid!

2) Confirm the role of the person putting the item(s) into storage

This is a crucial step yet can often be overlooked. All provinces and their respective Act’s that protect storage facilities against unpaid fees require notice to be provided to all interested parties but ONLY IF the item(s) are deposited into storage by someone other than the owner (or someone authorized to act on the owner’s behalf).

It is very important to have the person that dropped off or otherwise caused the item(s) to be put into storage confirm who they are and what their relation to the stored item(s) is. If it is the owner, try to confirm with ownership documentation or anything else that may back this up. If they work for or were hired by the owner, contact the actual owner and have them confirm in writing that they authorize the storage.

This may sound excessive but failing to do so can result in many headaches and a lot of lost storage charges in the future.

So you know that you have to issue a Notice of Lien and now you need to know where to send it. If you have no ownership information at all this step can at times get a little tricky, as ownership of most types of items is not something that can easily be looked up by just anybody. That being said, it is a step that is worth spending some time on as it can save you a lot of money down the line.

Contacting whoever caused the item(s) to be stored, whether the person or authority that caused it to be stored under impound or the individual that dropped it off, and trying to find a name and address for the owner will be your best bet. Alternatively, you can resort to trying to find some kind of identifying documentation that may confirm ownership on the stored items themselves (without being too invasive).

A Notice of Lien has to be issued not only to the owner(s) but also to any other “interested parties”, which for the most part means registered lien holders. As someone who worked in the industry for ten years, I can confirm that this is something that leasing/financing companies know to look for and will demand proof of before paying to bail out a vehicle or other asset that they have an interest in.

Now that you are ready to go you just need to draft your notice. The notice must contain specific information required by the provincial Act and be issued by either registered mail or hand delivery.

With Recourse, you can easily create your own expert Notice of Lien in just a few minutes, and send it by Registered Mail without the need for printing, postage, or that dreadful trip to the post office.