Restitution Liens
By Richard Marmor, Esq.
AZSA Legal & Legislative Chair
Many of us have attempted to sell unit contents, usually a motor vehicle, only to find ourselves frozen, unable to act, because some kind of government lien appeared of record on the vehicle. One version of that problem is going away.
“Restitution liens” are liens granted by criminal courts against the property of convicted criminals in an effort to compensate the victims of the crimes. The idea is that if the criminal’s assets are ever sold, the proceeds of sale go to the crime victim.
The problem until now has been that if you auctioned a vehicle with a restitution lien recorded against its title, the Motor Vehicle Department would not recognize the transaction, and an angry buyer would be back at your door.
The 2010 change to our lien law now permits us to sell a vehicle – actually any property – that is the subject of a restitution lien.
In order to get this ability to sell put into the statute, we had to first obtain the blessing of the State Attorney General’s office. Seeking a way to reconcile our needs with the rights of crime victims, we had to face a reality of our business: Our auctions are not about money. We rarely realize what is due to us. As a practical matter, our auctions are thus really about getting our units back. So a deal was struck: we get to sell the stuff. We can keep our costs of sale (postage, auctioneer’s commission, etc.), but we must pay the remaining proceeds of sale to the lien holder. When you consider the alternative, sitting with the unit tied up endlessly, it’s a pretty good deal.
If you get a motor vehicle record from MVD which shows a restitution lien, or if you find such a lien recorded at the Secretary of State’s office with respect to other property, contact the lien holder (it may the court as opposed to the actual victim), and make sure the lien is still outstanding. If it is, verify the amount (you don’t want to send more money than you need to); find out where to send it; then conduct your auction as you normally would. Deduct your costs, and send the balance of proceeds as directed. Obviously, if you sell the contents for more than the amount of the lien, you get to keep the excess to treat like any other sale proceeds.
The day after the Governor signed the new law, we began working with the Motor Vehicle Department regarding updating their internal procedures so they comply. We can only hope that this process does not take nearly seven years to implement there, as did our last motor vehicle bill....
Restitution liens cost states nothing yet promise some relief for crime victims. As a result, they are becoming increasingly popular. We can expect to see more and more such liens show up in the future.
Be aware that other governmental liens, e.g., tax liens, are not the subject of this new law. Those situations have not changed, and sadly, likely never will.
[This article deals with a law related subject at a general level and is not intended for you to rely on. You should consult a lawyer before making a final decision in a situation involving any legal issues.]
Richard Marmor, Esq. is a self-storage consultant, facility owner and former facility operator in the Phoenix area. He is also the founding President and current member of the Board of Directors of the Arizona Self-Storage Association, serving as Chair of the Legal and Legislative Committee.
Source: Behind Closed Doors, AZSA Newsletter Archives