From my understanding it’s legal when the repo guy comes to repossess whatever they are coming to take, but for example I saw a show about repo guys that repossessed privately owned planes, and they have to be sneaky about it. Like they’re basically stealing it, but it’s legal? Like security would try to stop them. Why are they not able to produce papers that prove they are repossessing an item and be allowed to take said item ?
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Former auto/boat repo person here. The reason you often have to do some sneaking is because the person who you are repo’ing from obviously doesn’t want you to take the vehicle, and will resist you taking it.
You do have the legal right to take the property, however you have limited power to use any force. So if the person sees you about to repo their car, and decides to jump into the car, you can not physically remove them. You also can not tow the car with them inside it. If you can block the car from leaving it’s current location then you have every right to call the police, and they will gladly force the person to get out, and assist you with the repo. This sounds great but the downside is that you have to stay with the car until the police arrive. This could take an hour or more. All the while, you have to babysit the car and deal with the person/people trying to stop you.
Because drama makes for good TV.
In reality the whole thing is a lot more boring most of the time.
Given it’s a reality show, it’s a good bet a lot of the drama is staged. Walk into an airport, show ownership of the plane, the airport doesn’t really care.
Repossession rights arise out of an area of law called “secured transactions”. A secured transaction is an agreement that a “secured party” gives somebody something of value (usually money) to a “debtor” in exchange for a promise to perform (usually paying that money back plus interest). What happens if the debtor breaks their promise? The secured party takes what’s called “collateral”. Collateral is the rights to property in the event that the debtor breaks their promise. A secured party will ask the debtor to give them collateral that will get them reasonably close to covering their losses if the debtor breaks their promise.
For example, a bank gives a restaurant a business loan for $50,000. What happens if the restaurant goes out of business? Maybe the bank says “okay, I’ll give you $50,000 now if you give me $55,000 a year from now. But if you break your promise, I get to take all your stoves and refrigerators and sell them”. Further, the bank is going to say “you have to pay me back on this date. If not, the equipment autimatically becomes mine.” That’s called “default”.
Upon “default”, the ownership of the collateral automatically transfers to the secured party- usually lender of some sorts. There’s no purchase or formalities required. If the restaurant goes broke, they will instantaneously no longer own that refrigerator and stove. At common law, in both civil and criminal law, reclaiming your rightfully owned property is usually a defense to trespassing, both civil and criminal.
Nowadays, the rules are more fleshed out in a document called the UCC, which is the law in all 50 states. The UCC is a long complicated document, but the rules for reposessing collateral after default basically boil down to (1) don’t kill anybody (2) don’t hurt anybody (3) don’t make a scene. Otherwise, the UCC pretty much allows a secured party to trespass for purposes of reclaiming property that’s now rightfully theres.
There are some other rules too. What happens if the restaurant takes out the loan from the bank, and then a month later, takes out another loan from a different bank and offers up the same collateral. What happens if the restaurant defaults on both loans. Well, the first bank has a security on the stoves and fridges and so does the second bank. Wait a minute, who gets to keep it at the end. Is it one or the other? Do they have to split it up? Well, the general there’s a system called perfection – which is a record database that basically shows all the secured transactions that a person or business has entered into and other parties that have called dibs on the debtor’s stuff if they go broke. That’s called “priority”. That way, the second bank can stop and go “whoa whoa whoa, you already offered that collateral to somebody else. Give me something different as collateral or I’m not going to loan you anything!” If the second bank says “fuck it” and doesn’t check the database and the first bank has already called dibs, the second bank is out of luck, even if the restaurant was tyring to pull a sneaky and post the same collateral on two different loans, but that basically never happen because sophisticated lenders use this system regularly.
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