Australia: Time is running out to rectify security interests in personal property

Last Updated: 31 January 2017
Article by Michael Bishop and Lachlan Chisholm

Holders of registered security interests in personal property are urged to check their registrations before 31 January 2017, as the final transitional period for the Personal Property Securities Register (PPSR) comes to an end.

The transition to the PPSR

The PPSR is an online register that allows individuals and businesses to register their security interests in personal property, such as motor vehicles. A search of the PPSR can be made in order to find out whether a security interest is registered over a specific item of personal property.

The PPSR was introduced in 2012 to consolidate multiple different registers of security interests for personal property. Its implementation involved migrating all existing registered security interests to the new system, some of which contained incorrect or insufficient information. To account for this, the Australian Financial Security Authority (AFSA) opened a window for secured parties to rectify their registered security interests, which closes on the 31 January 2017.

Section 153(1) Item 5 of the Personal Property Securities Act 2009 (Cth) (PPSA) requires that the following categories of property have an end time for registration:

  1. consumer property;[1] or
  2. property described by a serial number.

For these two categories of property, the end time for registration must be specified as 7 years from the date of registration or 7 years from the date of an amendment to the registration. Examples of the types of property falling within the above two categories may include motorcycles, caravans or trailers.

What to do if you are a secured party

The first step for secured parties is to check whether their registered security interests were migrated to the PPSR without an end date.

For those with an existing PPSR login, a report can be generated on the PPSR website to check whether an end date is specified on their registration(s). For those who need to find and claim their migrated registration(s), they must access the PPSR website, create a PPSR account, create a Secured Party Group (SPG) and apply for access. Once a migrated registration has been retrieved on the PPSR website it can then be amended. The end date can be changed but not all registration attributes can be changed.

Take home message

If a migrated registration in one the abovementioned categories of property does not have a specified end date and is not amended by 31 January 2017, the secured party will risk losing their protection under the PPSR.

It is crucial for secured parties to check their migrated registrations to ensure that their security interests are protected by the PPSR. Accordingly, the AFSA has recommended that secured parties seek legal advice if they are concerned about the effectiveness of their PPSR security interests.

Pointon Partners are able to assist with accessing the PPSR, reviewing registrations and updating registrations as required.

If you have any queries or you require advice in relation to personal property securities, please contact Michael Bishop or Lachlan Chisholm on (03) 9614 7707.

Footnotes

1 Consumer property is defined as 'personal property held by an individual, other than personal property held in the course or furtherance, to any degree, of carrying on an enterprise to which an ABN has been allocated'.

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Authors
Michael Bishop
Lachlan Chisholm
 
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