The Personal Property Securities Act (PSSA)

11 Oct The Personal Property Securities Act (PSSA)

Overview

The Personal Property Securities Act is a Commonwealth Act which establishes a central Personal Property Securities Register (PPSR) where security interests in property are recorded. It will replace some Commonwealth and state registries such as the ASIC company charges register and the NSW Security Interests in Goods register and the NSW REVS register.

The Act provides a system of priority by registration and will also be searchable so that anyone can ascertain whether goods are already subject to a security interest.

Personal Property is any form of property other than land, buildings and fixtures and includes but is not limited to:

• Motor vehicles
• Art
• Machinery and equipment
• Inventory of a shop, hotel or other business
• Crops
• Company charges
• Intellectual property rights
• Rights under Retention of Title clauses
• Contract rights

Registration under PPSA

The Registration Commencement Time (RCT) is 30 January 2012. If you have existing security interests which have not been registered at the relevant registry then you will need to register your interest in the property under the PPSA.  Some registries are closed before 30 January 2012 such as the NSW Security Interests in Goods registry at the Registrar Generals which closes on 19^th January 2012.

Under the PPSA existing securities under these registries will be migrated to the PPSR and will be known as a Transitional Security Interest (TSI). For the purposes of the PPSA, the TSI will be “attached” to the property which it secures immediately before the RCT and will have priority over any subsequently registered security interests in the same property until 30^th January 2014 or until the security is “perfected” by registration on the PPSR. It is important therefore to register any TSIs on the PPSR as soon as possible after 30 January 2012 so that it is not forgotten later down the track. Priority may be lost if perfection of title has not taken place by 30 January 2014.

What you should do next.

1. Check whether you hold any security over property which has not been registered in the appropriate registry.
2. If you havenot  registered before 30 January 2012, then you will need to register the security interest as soon as possible after 30 January 2012. This can be done by completing a “financing statement” or “financing Change statement” which will be able to be done on-line.
3. If you have an existing security which was migrated to the PPS and is a TSI, check the PPSR shortly after 30 January 2012 to see that the registrations have been effectively migrated and if they have not, attend to rectification of this.
4. Perfect the TSI after 30 January 2012 before 30 January 2014 to ensure that priority is maintained.
5. Review your business practices and transactions to see whether there are any transactions which now need to be registered which may not have needed registration before e.g. an owner’s interest in personal property leased with land (eg a hotel inventory), goods the subject of sales by way of retention of title.

If you need any information about the PPSA and how it will affect you or your business, please contact Ian Smith to discuss practical solutions to any issues you may have in relation to the PPSA.

This general summary has been prepared from information in the fact sheets about PPSA at www.ppsr.gov.au.It does not constitute legal advice.