We have found that many construction contractors are surprised to learn that registering Personal Property Security Interests ("PPSI") is not only useful for plant hire companies but also for contractors.
In fact, PPSI registrations can help construction contractors in the event of their principal's insolvency by:
- Enabling suppliers of materials that have not yet been incorporated into building works to take back those materials if they have not been paid for; and
- Enabling suppliers of building materials and copyrighted plans and drawings to be paid the price for those supplies in priority over the principal's other creditors.
But PPSI registration will only have this effect if it is done on time and properly. This requires a practical understanding of the PPS Act and effective internal systems and procedures.
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.