The Personal Property Securities Act 2009
The Personal Property Securities Act 2009 (“PPS Act”) is a law about security interests in personal property. A security interest is an interest in personal property that in substance, secures payment of a debt or other obligation.
The Personal Property Securities Register (“PPSR”) is an online record of security interests in personal property. It allows you to:
- Register a notice to show that you have rights over personal property which secure a debt or obligation that someone owes you;
- Check if someone has registered an interest over your personal property; and
- Check if someone has registered an interest over the goods that you intend to purchase.
The PPS Act covers:
- the retention of title clauses in contracts whereby a purchaser has possession of property, however, does not acquire title from the vendor until the full purchase price is paid,
- any leases and bailments of personal property entered into on or after 20 May 2017 for a term exceeding 2 years
- any leases or bailments of personal property entered into before 20 May 2017 for a term exceeding 1 year.
If you are selling goods on retention of title terms, it would be prudent to register your interest over those goods pending full payment from your customers.
If you are leasing goods – especially if they are high value, or for extended periods of time including time granted under option to renew – you should also be registering your interest in those goods to ensure your ownership is clearly signposted to any creditors in the event that your customer was to become insolvent or bankrupt.
You may consider registering your interest only for selected customers, in particular those who have a trading account with you and with high credit limits.
If you would like to discuss the how registering security interests may be beneficial for your business, please do not hesitate to contact our Commercial Law Team on (03) 9739 7377.
Written by RNG Lawyers Commercial team, Anthony Scundi. Contact us