personal property register Tag

Riba Business LawyersThe government has introduced new legislation called the Personal Property Securities Act (“PPSA”) which is likely to come into effect on 30 January 2012.  It will dramatically alter the way we deal with personal property and the way in which security over personal property can be protected.

“Personal property” is any property except land, fixtures to land and some statutory licences. For example machinery and equipment, inventory, motor vehicles, shares, book debts, receivables, stock, crops, trademarks and patents are all forms of personal property.  Your family home will not be personal property under the PPSA.

The PPSA will regulate any “security interest” in personal property.  The scope of what can constitute a security interest under the PPSA is wide and will include a number of interests which the current law does not recognise as security interests.  If you do not protect your existing or future rights in personal property you risk losing your security interest in that property. By way of example, you could lose:

  • priority over secured property to another creditor; or
  • title to your property if it is left in the possession of someone else (eg. if they sell it or if they go into liquidation, voluntary administration or bankruptcy).

The Australian Personal Property Security Register was due to commence in May, then October this year and now, will commence in early 2012. It will affect most businesses and it is worthwhile looking at the impact of these new laws as soon as possible. Financiers, Lessors and Suppliers will need to make sure that they do not lose their rights over assets which they have secured. Buyers will need to make sure that no-one else has an interest in the item they are buying.

The new register will replace most traditional securities including bills of sale and company charges.

So what should you do to ensure that you are not affected?

The implementation of the new Personal Property Securities Register (PPSR) will affect most Business across Australia. Business owners and individuals who take security interests over personal property will need to understand the new system and how it differs from the existing registries. We will run through the some of the terminology and benefits of the new Register as well as provide some helpful information about ensuring your security interests are protected. In the same way that you can lose your interest in a house if you do not register that interest on the title. You can also lose your interest in any personal property in which you have taken an interest if it is not registered. If you operate a business where you retain title to goods until you receive payment then these changes have a particular impact on you.