As anticipated after the Parliamentary review of the
Personal Property Securities Act 2009
(PPSA) completed earlier this year, and with the
aim of reducing the number of lease transactions that fall within
the scope of the PPSA, the Australian Parliament has recently
passed legislation amending the PPSA with respect to what is a PPSA
The amendment will mean that clause 13(1)(e) of the PPSA will be
repealed. At this stage, it is anticipated that the amendment will
come into effect on 1 October 2015, however this date is not yet
Clause 13(1)(e) of the PPSA currently provides that a lease of
serial numbered goods (for example motor vehicles) is a lease under
the PPSA if it is for a term of 90 days or more, whether that is
made up of a single set term, an initial term with options, or is
the period that the lessee actually retains possession of the
When the amendment takes effect and clause 13(1)(e) is repealed,
any lease of serial numbered property to a commercial customer for
a term of less than 12 months (including any option terms) will not
be a PPSA lease, and registration under the PPSA will not be
possible or necessary in order to protect an ownership interest.
Any lessor should however be able to provide proof of ownership, to
avoid any risk of loss.
Even after the amendment takes effect, the remainder of clause
13 will continue to apply, which means that certain lease
transactions will continue to be PPSA leases, and registration of
any lessors' interests under such leases should be considered
and if necessary made to protect the lessor.
This amendment is aimed to reduce the complexity, time and cost
for parties entering into hire or lease arrangements with
We will continue to provide updates as they are available, and
will confirm the effective date of the amendment as soon as it is
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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