Legal Definitions - Possessory lien

A possessory lien is a type of interest that secures payment or performance of an obligation for services or materials provided in the ordinary course of business. This lien is created by statute or other law and does not include security interests or agricultural liens. The value of this lien depends on the individual's possession of the goods in question.

• A mechanic who repairs a car has a possessory lien on the car until the owner pays for the repairs.
• A dry cleaner who cleans a customer's clothes has a possessory lien on the clothes until the customer pays for the service.

These examples illustrate how a possessory lien works. The mechanic and dry cleaner have possession of the goods (the car and clothes) and can hold onto them until the customer pays for the services provided. This gives them a legal right to keep the goods until the obligation is fulfilled.