The PPSA or Personal Property Securities Act came into effect on 30 January 2012.
This new legislation will affect the majority of businesses and it is imperative to understand how this new legislation will affect you!
The PPSA legislation creates a new register operated on a national basis on the internet that replaces a majority of major registries including ASIC company register and the REVS (register of encumbered vehicles).
The PPSA will require the registration of interests in personal property that have not previously been registered.
Secured parties and other interested parties would be able to search the PPS Register to find out whether a security interest is registered over the personal property.
Transactions that have previously not required registration which will come under the new PPSA legislation include:
- fixed and floating charges;
- long term and finance leases of goods;
- chattel mortgages;
- hire purchase agreements;
- conditional sale agreement (including retention of title arrangements);
- retention of title arrangements; and
- consignment of goods.
- bank accounts
- intellectual property
- motor vehicles,
- agricultural property,
Why is this legislation necessary?
This new legislation has been enacted to ensure that interests in personal property are perfected.
What does this mean?
Perfection is the term used to describe the process of cementing the registration, possession or control of personal property security interests to ensure the interest is enforceable. In other words, this protects the interests of property owners when that property is placed in the care of another.
By ensuring security interests are perfected this secures payment or performance of an obligation (without regard to the form of the transaction or the identity of the person who has title to the property)‘.
If “secured parties” (as PPSA calls them) choose not to perfect, then they face the possible loss of their property or rights.
What do you need to do?
- Review the documents used in your business to determine whether security interests have been granted;
- Draft any required amendments to deal with the PPSA; and
- Seek advice as to how the security interest may be perfected.