If you were granted a security interest before the Personal
Property Securities Act 2009 came into effect on 30 January
2012, to receive the protection of the Act if you were unable to
register that interest before the introduction of the Act, you need
to ensure that your interest is correctly registered on the
Personal Property Securities Register (PPSR)
before the transitional period expires on 30 January 2014.
The transitional period allows for security interests created
before 30 January 2012 to be temporarily perfected, meaning that
any existing security interest that is not registered on the PPSR
retains the same priority it had at 30 January 2012 against other
security interests in the same property that were created and
registered after 30 January 2012.
There are certain transitional security interests that should
have migrated to the PPSR automatically, for example company
charges that were previously registered with ASIC. However, these
security interests should also be checked to ensure that they have
correctly migrated to the PPSR. If you have a migrated transitional
security interest that is not correctly registered on the PPSR
before 30 January 2014, you will not be properly protected.
What does this mean for you?
If you have a transitional security interest that is not
registered by 30 January 2014, you risk losing your priority
against other creditors even if your interest was granted
before theirs, or your security interest transferring to the
person/party that granted you the security interest if that
person/party becomes insolvent.
The Act covers a broad range of interests, and to make sure that
you will not be adversely affected by the expiry of the
transitional period on 30 January 2014, you should review any such
agreements that were entered before 30 January 2012.
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.
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