By: Nicholas K. Rohner, Attorney
On June 24, 2015, amendments to two sections of Kentucky’s mechanic’s lien statute, KRS 376.268, et seq., took effect. For background, KRS 376.270 has long provided that a person engaged in the business of repairing vehicles has a lien on a vehicle for reasonable or agreed charges for repairs and storing that vehicle, and may detain the vehicle until the charges have been paid. This essentially gives a garage a senior lien on a vehicle in the amount of any repairs done as well as for the costs of any incidental storage.
Amended KRS 376.268 adds a new paragraph defining what “reasonable charges” are:
(3) those charges which are usual and customary, not discriminatory, and which are typical charges for services provided by similar towing or storage companies with similar equipment and facilities operating in the region or comparable-size city or county from which the vehicle was towed or stored.
This new paragraph was presumably added to protect vehicle owners and lienholders from unscrupulous garages who have been charging exorbitant storage fees when a vehicle was left following a repair.
A different section, KRS 376.275, deals specifically with involuntary tows and the storage resulting therefrom. If a vehicle is involuntarily towed pursuant to police order or at the request of a private person or business, the garage or storage company has a duty to notify the registered owner about the impoundment within 10 business days from the date of the tow, or it is limited to storage fees accrued after 10 business days. While that requirement is still in effect, the Legislature added a new paragraph requiring that the garage or storage company must now also notify any recorded lienholder of the impoundment within 15 calendar days of the tow or else it is limited to just 15 calendar days of storage. This is a significant protection for the lienholder, who previously was not entitled to any notification of impoundment and often found itself facing a large storage lien once the impoundment was discovered.
Also under amended KRS 376.275, upon notification, the lienholder has the right to take possession of the vehicle after showing proof of its lien and paying the reasonable towing or storage charges. Now with a definition of “reasonable charges” in place under KRS 376.268 (see above), the amount of storage fees that must be paid by a lienholder to recover an impounded vehicle should be minimized, provided the lienholder acts quickly upon the receipt of the garage or storage company’s notice of impoundment.