It is not uncommon for tradespeople, professionals and
businesses alike to encounter customers who refuse or neglect to
pay their bills. Although a lawsuit is always an option in these
scenarios, many simply choose to write off the loss as bad debt
rather than throw good money after bad, especially when a debtor
has relative few assets and a lawsuit might result in a dry
Fortunately for mechanics, however, the British Columbia
Repairer's Lien Act provides a method for securing
payment of unpaid bills without having to commence a lawsuit. The
Repairer's Lien Act gives a mechanic a lien on the
vehicle he or she has repaired for the total cost of the repairs,
and the mechanic is entitled to sell the vehicle to pay the
debtor's bill if the bill is still unpaid 90 days after it was
While the mechanic's lien is virtually automatic, it is
important to note that the lien exists only as long as the mechanic
has the vehicle in his or her possession. If for any reason a
mechanic wants to relinquish possession of the vehicle to a debtor,
for instance if the mechanic doesn't have enough space to hold
the vehicle, the mechanic can preserve the initial, possessory lien
(a) before surrendering possession of the vehicle,
obtaining a signed acknowledgement of debt from the debtor (a
signed invoice will suffice); and
(b) registering a "financing statement" in the British
Columbia personal property registry within 21 days after possession
Once a mechanic has registered the financing statement, the
mechanic's lien is preserved and continues to exist for a
period of 180 days after the date of registration. At any time
during this period, the mechanic can engage a bailiff to seize the
vehicle and return it to the mechanic's garage, whereupon the
mechanic will be, as above, entitled to sell the vehicle to pay the
debtor's bill if it is more than 90 days overdue.
A mechanic who is considering relinquishing possession of a
vehicle to a customer who hasn't paid his or her bill should,
before doing so, consider the likelihood of a bailiff being able to
locate the vehicle if and when the time comes to seize the
The mechanic's lien, or repairer's lien as it is
otherwise known, is a very powerful tool for mechanics in BC. The
mechanic's lien is first in priority to nearly all other liens,
with only a few narrow exceptions, such as where an innocent third
party has purchased the vehicle after the mechanic has surrendered
it to the debtor, but before the mechanic has registered the
It is very important to note that a financing statement that is
registered in the BC personal property registry in order to
preserve the lien must strictly comply with the Repairer's
Lien Act, the Personal Property Security Act and the
Personal Property Security Regulation. Even a small
error—for instance, in the serial number or the legal
description of the vehicle—may invalidate the financing
statement and the associated lien, so if you're unfamiliar with
the process, seeking the help of a lawyer is never a bad idea.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
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