Legislation has now been passed amending the Personal
Property Securities Act 2009 (Cth) (PPSA) to
reduce the number of leases deemed to be 'PPS leases' under
s13(1)(e) of the PPSA.
The effect of the amendment is that a lease of serial numbered
goods for a term of 90 days or more, but less than 12 months, will
no longer need to be registered as a PPS lease to preserve its
priority and provide protection for the lessor on insolvency of the
lessee. Serial numbered goods include motor vehicles, caravans,
forklifts and watercraft.
The amendment only applies to leases entered into after the
legislation commences, and it will not affect leases with a term of
more than 12 months or leases capable of being renewed beyond a 12
The main impact of this amendment is likely to be on businesses
in the short-term hire and rental industry, as well as their
The Attorney-General's Department is seeking industry input
on an appropriate commencement date for the amendment. Currently,
the amendment is set to become operative on 26 December 2015 if no
commencement date is designated, however the Department proposes an
earlier date of 1 October to coincide with the second quarter of
the financial year.
The amendments are deregulatory in nature and should reduce the
work that hire and rental businesses, as well as their financiers,
need to undertake to comply with the PPSA. However, transitional
work may still be required, such as adapting business processes,
training, documents and IT systems, especially those that interface
directly with the PPS Register via the Business to Government (B2G)
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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