PPSR: Last Chance to Register Security Interest
The two year transitional period under the Personal Property Securities Act 2009 (Cth) (‘PPSA’) ends on 31 January 2014.
If you have been granted a security interest prior to 30 January 2012, it is time to review your existing security arrangements and confirm the security interest is appropriately recorded on the Personal Property Securities Register (‘PPSR’) before 31 January 2014.
If a security interest is not registered before the 31 January 2014, title to an asset can be lost in the event of insolvency if the insolvent party is in possession or control of the asset. Title can also be lost to a subsequent security interest holder if they register an interest on the PPSR. Registration or perfection of a security interest is essential to protect your interests from such risks.
There are also interests that were not previously regarded as security interests or registrable under legislation prior to the PPSA that are now regarded as security interests and they can and should be registered.
Examples of agreements which may give rise to a security interest under the PPSA include:
- Financing/leasing agreements;
- Retention of title/consignment agreements;
- Transport/haulage/storage agreements;
- Shareholder/joint venture agreements (containing charging provisions over personal property);
- Real property leases (in circumstances where the landlord retains ownership of fit-out and/or equipment).
While certain security interests granted prior to 30 January 2012 were automatically migrated to the PPSR from various Commonwealth, State and Territory pre-PPSR registers, it is necessary to check if the security interest has been successfully migrated. Issues arose during the migration process which means there is no guarantee that all migrated charges were correctly registered on the PPSR, which presents a risk to security interest holders. Discrepancies in recording company details and serial numbers are just a few examples of how the migration process was flawed.
Details regarding registering and/or searching for a security interest can be found on the PPSR website.
For more information about registering and searching a security interest, or to better understand the possible implications of the PPSA for your business, please contact Bradley Allen Love.