Brief Summary
Before you can foreclose a possessory lien on a vehicle and get it titled through Oregon DMV, you need a $20,000 bond on file. It is a one time setup that covers every lien you foreclose while it stays in force, you pay a yearly premium rather than handing DMV a $20,000 letter of credit, and the signed form simply goes in the mail to DMV Business Licensing in Salem.
ORS 87.152 requires anyone who creates a possessory lien on a motor vehicle to have a $20,000 surety bond or irrevocable letter of credit in effect with Oregon DMV first. Tow businesses holding a DMV towing certificate, franchised motor vehicle dealers and manufacturers are exempt. The bond is written on DMV form 735-522B, runs to the State of Oregon, and is mailed to DMV Business Licensing.
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Detailed Information About the Oregon DMV Certificate of Possessory Lien Foreclosure - MAIL Bond:
Who has to post this bond
Repair shops, storage facilities, landlords and other businesses that hold a vehicle until they are paid can claim a possessory lien and eventually foreclose it so the vehicle can be sold and titled. Under ORS 87.152, a lien claimant must have a $20,000 surety bond or irrevocable letter of credit in effect with the Department of Transportation before creating a possessory lien on a motor vehicle.
The amount is flat. It does not change with the value of the vehicle or the number of liens you foreclose.
Who is exempt
The statute and DMV's instructions exempt franchised motor vehicle dealerships, vehicle manufacturers, businesses holding a towing business certificate from DMV, and national auction companies titling vehicles under ORS 87.152(3). Liens on abandoned vehicles are also handled separately. If you are a general repair shop or storage operator without a tow certificate, you post the bond.
What the bond covers
The bond must be issued by a corporate surety authorized in Oregon, approved by the Attorney General as to form, and filed with and held by DMV. It compensates anyone damaged when a possessory lien is used in connection with a misrepresentation, fraud or violation of duty. DMV's form states the bond is continuous and stays in effect for the whole certification period until depleted by paid claims.
Filing and keeping it current
The bond is written on DMV form 735-522B and mailed to DMV Business Licensing, 1905 Lana Ave NE, Salem, OR 97314. Each year you must certify in writing to DMV that the bond is still in effect. If a claim is paid against the bond, ORS 87.152 requires a replacement bond within three business days.
When you foreclose, OAR 735-020-0012 requires the correct Certificate of Possessory Lien Foreclosure for your lien type with the title application. Your signature certifies you followed every statutory step, and DMV treats that certificate as proof of ownership.
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