On 30 January 2012 the Personal Property Securities Act 2009
(Cth) (PPSA) will commence, creating a single, national
electronic register for all personal property security interests.
But how will this legislation affect other property and business
As we have
previously outlined, the PPSA will consolidate a number of
State and Commonwealth Acts that deal with validity, priority,
enforcement and extinguishment of security interests in personal
property and establish a national register for the registration of
these interests, the PPSR.
It is important that security interests in personal property are
registered in the PPSR, as registration will be required to prove
ownership after the 2 year grace period has expired. Personal
property excludes land, buildings and fixtures attached to land. A
lease of land or a lease of fixtures (such as a building) on land
is also expressly excluded from the operation of the PPSA. However,
the PPSA will affect the priority of competing security interests
over chattels located on land.
Consequently, clauses in leases which deal with abandoned goods,
fit-out and security over a tenant's fittings should be
reviewed by the landlord to determine whether registration is
required in the PPSR in order to protect the landlord's
It is also important that landlords consider any leases entered
into before commencement of the PPSR. A person who holds a
registrable interest before the PPSR commences is given a 2 year
grace period in which to register their interests. During this 2
year period, interests in existence before the commencement of the
PPSR will be given temporary priority. These interests are known as
transitional security interests (TSI's). During this 2 year
period, a TSI is given priority over any interest created on or
after 30 January 2012 that is registered on the PPSR.
In order for a TSI to retain its priority after the expiry of
this 2 year period, the interest must be registered in the PPSR
before 30 January 2014. Priority between TSI's will be
determined in accordance with priority rules in existence at the
time the interest was created. There is no registration fee payable
to register a TSI during the 2 year grace period.
New security interests created after 30 January 2012 will
attract registration fees between $7.40 and $144.80, depending on
the duration of the registration and whether the documents are
lodged online or in person.
Buyers of a business should also search the PPSR for any
registered interests over the business assets and obtain
appropriate releases from any security holders who are registered
on the PPSR.
Search fees for the PPSR register range between $3.70 and
$11.60, depending on the particular search required.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
In the years following the global financial crisis of 2008 many Australian investors lost their life savings as financial products failed and the Australian Stock Exchange shed over 3,000 points.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).