This is a piece of legislation that receives little attention, although for people in the repair and storage business, it is a powerful weapon.
The Act applies to anyone who repairs or makes improvements to other people’s stuff (except land or buildings – that is the domain of construction liens). Stuff is an easier word to understand than “chattels” or “personal property”. Cars and machinery are a good examples of stuff with which I often deal. An obscure example is a record producer who modifies a band’s demo tapes.
The Act also applies to the storage of other people’s stuff, whether a repair is part of the deal or not. I use the Act on behalf of commercial landlords, in order to deal with stuff left behind by a tenant whose lease was terminated or who abandoned the property.
If you still have the stuff and you haven’t been paid for the repair or storage, then you have what is called a possessory lien.
You have a non-possessory lien if you gave the stuff back after it was stored or fixed, but you never got paid. If you gave the stuff away and want to get it back to force payment, then you have to have something signed by the person who originally gave the stuff to you which confirms how much is owed. Then you send out the sheriff or a bailiff to repo it. It’s also a good idea to register your non-possessory lien in the PPSA system, as that puts others on notice of your rights to the goods. It also helps to establish priorities between competing creditors.
If you still have the stuff in your possession or got back by way of seizure, then there are mechanisms that allow you to sell it, keep it or give it away.
If the owner of the stuff wants it back, then money can be paid into court by the owner and you have to give the stuff back. You then have a short period of time to commence a law suit to claim the money that’s in court. If you don’t do that, the owner can get the money out of court after the deadline passes.
I use the Act very often for my car leasing clients. For example, a repair shop says it’s owed money for work done after an accident. The leasing company has no idea of the accident as the person leasing the car never told them about it. I’ll have the leasing company pay money into court to get the car back. The repair shop doesn’t know what to do, so then I get the money paid out of court once the time to sue expires. The repair shop can’t thereafter sue my client for the cost of the repair, as my client was never part of the repair deal. The repair shop has to try to track down the person who leased the car, who is now long gone (usually having defaulted on the car lease as well). If the repair shop does sue in time to claim the money paid into court, then we negotiate a settlement if it appears that the repair was actually performed (since the repairer has lien rights to the money in court).
This is just an overview and by reading this, you can see that using a lawyer to help you enforce your rights is a good idea. Feel free to contact me directly if you have an RSLA issue you would like our firm to handle.
Paul H. Voorn, LL. B