What Happens When a Vendor Places a Lien on Your Vehicle in Houston, Texas?

In Houston, a vendor lien on your vehicle's title represents a third-party financial security in your vehicle until the vendor's charges are paid. Similar to a bank or credit union lien, the vendor lien will only be taken off your vehicle's title when the vendor's outstanding balance is paid off, which will release the lien solely into your name.

Co-Ownership of the Vehicle

The vendor that places a lien on your vehicle is a partial owner of the vehicle until the financial security owed to the vendor is paid off. In other words, the vendor is the secondary owner of the vehicle until you pay the vendor's fees.

Releasing the Lien

The only way to release a vendor lien on your vehicle's title is to pay the vendor, who will remove the lien from the title and send you the clear title, releasing you of all debt. If there is no financing on the vehicle, the vendor will release the lien to you once the vendor's fees are paid in full. Otherwise, you must satisfy your lender's lien before your clear title will be released to you.

Out-of-State Vendor Liens

Houston does not recognize clear (no vendor or financing lien) vehicle titles from other states unless you re-title your vehicle in Texas, which releases the out-of-state lender lien if the amount has been paid off. To title your vehicle in Houston, visit the Houston County Tax Office and fill out a title application fee. At the time of publication, the fee is $28 per vehicle and you must also provide a copy of your title and a release of lien form. Once your application has been processed, the Houston County Tax Office will send you a new, lien-free title.

Selling the Vehicle

If there is a vendor lien on your vehicle's title but you want to sell, you must fill out a release of lien form before the vehicle is titled to the buyer. You will also need to give the buyer your vehicle's title and last registration receipt. The new buyer must fill out a new title application form at the Houston County Tax Office, preferably with you present (in person). If the buyer cannot accompany you to the Tax Office, fill out a vehicle transfer notification form at the Tax Office within 30 days of the sale; the office will notify you when the buyer titles the vehicle, releasing you of all liability.