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POSSESSORY LIENS

A common situation that is brought to a lawyer is where a person has done work on the personal property, such as equipment or a motor vehicle, of another person and has not yet been paid for such work. If the person still has possession of the piece of personal property to which they put the work into, then one possible remedy they may have is a possessory lien under the Possessory Liens Act. In such a situation, the question most often asked by the person owed money is should I let the owner of the personal property take it, or do I have authority to maintain possession of it. The answer to this question is governed by the Possessory Liens Act of Alberta. If the person has expended labour or skill to a piece of equipment or personal property of another person at the request of that other person and the work has not been paid for, the person who is owed the debt is entitled to maintain possession of the property so long as the debt is outstanding. However, it is important to note that if the person claiming the debt or lien releases the property, the right to a possesory lien no longer exists. Thus, the requirements of having a possessory lien under the Possessory Liens Act are as follows:

1. The person must have expended work or skill on a particular piece of personal property;
2. That they expended this work and service at the request of the owner of the personal property and have thereby enhanced its value;
3. They have maintained continuous possession of the piece of personal property; (once the personal property is released, the lien no longer exists).

The process to enforce such a lien is provided under the Act. If the piece of personal property is of a value of less than $300.00, then after the expiration of three months in the case of a motor vehicle, and six months in the case of any other personal property, the lien holder may sell the property by any means and for any price that the lienholder considers reasonable. If the property is of a value greater than $300.00, then the Possessory Liens Act provides that a specific process for the lienholder to force the sale of the personal property. The process provided is that after the expiration of three months for a motor vehicle or six months in the case of any other piece of personal property, the lienholder may serve a written notice upon the owner specifying a place and time for payment, the amount owing and a description of the property detained, and that in default of payment, an application will be made to the Court for authorization to sell the property. As enforcing any possessory lien is usually complicated, it is always best to consult your lawyer.

By Glyn Walters
November 30, 2005