It is crucial that people who have a security interest in
personal property take it seriously or risk losing their security
Many businesses are struggling to understand the implications of
the Personal Property Security Register (PPSR).
In this article we have provided a simple summary and a timely
warning about what to do, following changes that were implemented
to the Personal Property Securities Act (PPS Act) in 2014.
The PPSR explained
The PPSR is a national, electronic register of security
interests in personal property which was
established on 30 January 2012.
It includes security interests in goods, vehicles, intellectual
property and any other personal property, but does not apply to
A "security interest" includes any interest in
personal property which is created by an agreement that secures a
payment or performance of an obligation to another person (for
example a fixed and floating charge over an asset).
The PPSR is the only register which determines whether a
is enforceable; and or
takes priority over other interests.
What about a security interest granted
before 30 January 2012?
The PPSR transitional period ended on 30 January 2014 and anyone
who was granted a security interest
before 30 January 2012 needs to ensure
that those interests are registered on the PPSR.
Failure to have a security interest registered on the PPSR will
mean that those interests will be unenforceable if a subsequent
security interest holder registers an interest on the PPSR.
Who is most likely to be affected?
This is particularly relevant for anyone who is engaged in the
Leasing and hiring equipment;
Supplying goods based on retention of title;
Mortgaging equipment; and
Imposing a charge over the property of individuals or companies
as security for loan repayments.
Note: Amendments to the PPS Act which commenced on 1 October
2015 means that businesses which frequently use fixed term leases
with a duration of between 90 days and 1 year over serial numbered
goods such as motor vehicles, aircraft, watercraft and other items
may no longer need to register those leases once the amendment
How you can do a search of the PPSR
Some security interests prior to 30 January 2012 have been
migrated onto the PPSR (for example, charges registered on the ASIC
Register of Company Charges) whilst others may not have.
Even where charges have been 'successfully' migrated
onto the PPSR, issues have arisen during the migration process
which mean there is no guarantee that all migrated charges are
properly registered on the PPSR.
Therefore it is essential that a check be done.
To ensure you are protected it is important that you search the
PPSR but before searching the online register you will need to set
up an account. Once you have an account and pay a small fee you can
search by serial number, individual or by company to locate a
The consequences if you don't register
Failure to register interests on the PPSR may result in the
priority of your interests being lost to other parties with
For intellectual property interests, this is the case
even if your security interests have
already been recorded on the IP Registers maintained by IP
Why simply claiming a 'retention of title' won't
You also should register your interest in goods supplied to a
customer where you and/or your business have not received full
payment. This will assist in the recovery of any debt that may be
Under the PPS Act a person who supplies goods on the basis that
the supplier retains ownership until paid, or leases goods to a
customer, can be treated as having a security interest in the
A failure to register can mean that the goods are lost to their
customers' creditors even though the owner of the goods has not
There has been much written about the PSSA and this article is
not intended to be anything but a simple 'heads up' message
so you have the essential details.
Identifying the issues is one matter, but having a workable plan
for you or your business is another matter entirely.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Developing an understanding of how people behave is necessary to identify potential issues and risks and to make changes.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).