Key protections under the Personal Property Securities
Act (PPSA) come to an end on 30 January 2014. Businesses that
have been relying on the transitional rules to protect existing
credit, hire or lease arrangements need to take action now or risk
automatically losing their rights in their property or position as
a secured creditor.
The PPSA affects arrangements such as:
sale of goods on credit with retention of title;
leases or licences of goods (particularly heavy vehicles or
business licence arrangements;
arrangements where contractors store property on the
principal's land (e.g. portable site office or large equipment
certain take-out rights under construction contracts; or
security arrangements for loans and UPEs.
The PPSA provisions apply to related party as well as third
party arrangements and, in our experience, the related party
transactions are often overlooked.
An arrangement that is subject to the PPSA and that existed
before 30 January 2012 may be protected until 30 January 2014 under
the transitional provisions.
However, unless the interests have been correctly registered by
30 January 2014 they will no longer be automatically protected.
Businesses should identify assets and arrangements that are
caught by the PPSA, and then take steps to protect those interests
– usually by registering the interests on the PPS
The registration process is very technical and a failure to
correctly record an interest on the register may mean a
client's interest is not protected from claims by third
parties. It is also important that clients who need to register
interests start this process as soon as possible so that the
registration is in place before the January deadline.
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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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