§ 16-207. Unpaid account settled by public sale; applicability of notice requirements

   (a) Sale of property. -- If the charges which give rise to a lien are due and unpaid for 30 days and the lienor is in possession of the property subject to the lien, the lienor may sell the property to which the lien attaches at public sale. The sale shall be in a location convenient and accessible to the public and shall be held between the hours of 10 a.m. and 6 p.m.

(b) Notice of sale. --

   (1) The lienor shall publish notice of the time, place, and terms of the sale and a full description of the property to be sold once a week for the two weeks immediately preceding the sale in one or more newspapers of general circulation in the county where the sale is to be held.

   (2) In addition, the lienor shall send the notice by registered or certified mail at least 10 days before the sale to:

      (i) The owner of the property, all holders of perfected security interests in the property and, in the case of a sale of a motor vehicle or mobile home, the Motor Vehicle Administration;

      (ii) The person who incurred the charges which give rise to the lien, if the address of the owner is unknown and cannot be ascertained by the exercise of reasonable diligence; or

      (iii) "General delivery" at the post office of the city or county where the business of the lienor is located, if the address of both the owner and the person who incurred the charges is unknown and cannot be ascertained by the exercise of reasonable diligence.

(c) Sale for storage fees of vehicle or mobile home subject to lien. -- If a motor vehicle or mobile home which is subject to a lien is delivered by the lienor to the possession of a third party for storage, and the charges for storage are due and unpaid for 30 days or more, the third party holder is deemed to hold a perfected security interest in the motor vehicle or mobile home notwithstanding § 13-202 of the Transportation Article and may sell the motor vehicle or mobile home in the same manner as the lienor under this section if he has first published and sent notice as required of the lienor under this subtitle.

(d) Title to purchasers of motor vehicles, mobile homes or boats. --

   (1) Except as provided in § 13-110 of the Transportation Article, the Motor Vehicle Administration shall issue a title, free and clear of any lien, to the purchaser of any motor vehicle or mobile home sold under this section, if the holder of the lien on the motor vehicle or mobile home submits to the Motor Vehicle Administration a completed application for a certificate of title with:

      (i) A copy of the newspaper publication required by subsection (b) of this section;

      (ii) A copy of the registered or certified letter required under subsection (b) of this section to be sent to holders of perfected security interests in the motor vehicle or mobile home and the Motor Vehicle Administration, and the return card;

      (iii) A copy of the registered or certified letters required by subsection (b) of this section to be sent to the owner of the motor vehicle or mobile home, and the return card;

      (iv) If applicable, a written statement from the lienor that the lienor stored the vehicle in accordance with an agreement with an insurer;

      (v) An auctioneer's receipt;

      (vi) If applicable, certification by holders of perfected security interests;

      (vii) In the case of mobile homes manufactured after 1976 and motor vehicles, a pencil tracing of the vehicle identification number or a statement certifying the vehicle identification number; and

      (viii) Any other reasonable information required in accordance with regulations adopted by the Administration.

   (2) The Department of Natural Resources shall issue a title, free and clear of any liens, to the purchaser of any boat sold under this section.

(e) Application of proceeds generally. --

   (1) If the notice required under § 16-203(b) of this subtitle was sent, the proceeds of a sale under this section shall be applied, in the following order, to:

      (i) The expenses of giving notice and holding the sale, including reasonable attorney's fees;

      (ii) Subject to subsection (f) of this section, storage fees of the third party holder;

      (iii) The amount of the lien claimed exclusive of any storage fees except as provided in subsection (f)(2) of this section;

      (iv) A purchase money security interest; and

      (v) Any remaining secured parties of record who shall divide the remaining balance equally if there are insufficient funds to completely satisfy their respective interests, but not to exceed the amount of a security interest.

   (2) Except as provided in paragraph (3) of this subsection, if the notice required under § 16-203(b) of this subtitle was not sent, the proceeds of a sale under this section shall be applied, in the following order, to:

      (i) A purchase money security interest;

      (ii) All additional holders of perfected security interests in the property;

      (iii) The expenses of giving notice and holding the sale, including reasonable attorney's fees;

      (iv) Subject to subsection (f) of this section, storage fees of the third party holder;

      (v) The amount of the lien claimed exclusive of any storage fees except as provided in subsection (f)(2) of this section; and

      (vi) Any remaining secured parties of record who shall divide the remaining balance equally if there are insufficient funds to completely satisfy their respective interest, but not to exceed the amount of a security interest.

   (3) For a motor vehicle lien created under this subtitle, if the notice required under § 16-203(b) of this subtitle was not sent:

      (i) The proceeds of a sale under this section shall be applied in the order described in paragraph (1) of this subsection; and

      (ii) The amount of the lien claimed in paragraph (1)(iii) of this subsection may not include any amount for storage charges incurred or imposed by the lienor.

   (4) After application of the proceeds in accordance with paragraph (1) or (2) of this subsection, any remaining balance shall be paid to the owner of the property.

(f) Exceptions to application of proceeds provisions; applicability of notice requirements. --

   (1) If property is stored, storage fees of the third party holder may not exceed $ 5 per day or a total of $ 300.

   (2) The exclusion or limitation of any storage fees as provided in subsection (e)(1)(iii) of this section and paragraph (1) of this subsection does not apply to any person who conducts auctions as a business in this State, and is required to maintain records under § 15-113 of the Transportation Article, and that person is also exempt from the maximum storage fee limits under this subsection.

   (3) The notice requirements of § 16-203(b) of this subtitle do not apply when:

      (i) The lienor conducts auctions as a business in this State and is required to maintain records under § 15-113 of the Transportation Article; and

      (ii) The lien arises out of that business.

HISTORY: An. Code 1957, art. 63, § 36, 43, 53; 1975, ch. 49, § 3; 1979, ch. 705; 1982, ch. 890; 1984, ch. 509; 1986, chs. 418, 651; 1987, ch. 9; 1991, ch. 600; 1992, ch. 595; 1995, ch. 428; 2011, ch. 65; 2013, ch. 43, § 5.