To avoid losing your security interest due to incorrect registration, we have created a useful list of some of the more common registration mistakes to avoid.
When it comes to the Personal Property Securities Register (PPSR), we can't help but ask: "It's been six years – what have we learnt?"
To address this, Madgwicks is publishing an informative series of articles over the next few weeks for those of you currently using the PPSR and those who may need to register the occasional dealing. The aim of these 6 articles is to help you better understand how the ersonal Property Securities Act (PPSA) applies to you and to avoid the common pitfalls in registration.
Registering an interest on the PPSR can be tricky and when done incorrectly can have dire consequences as mentioned in our earlier articles. To avoid losing your security interest due to incorrect registration, we have created a useful list of some of the more common registration mistakes to avoid.
What you need to know:
Defects that will render a registration invalid:
- Registering an interest on the PPSR in the name of an entity which is different to the name of the entity on the Security Agreement;
- Incorrectly identifying an interest as a transitional interest;
- Incorrectly identifying an interest as an ALLPAAP (all Present and After Acquired Property) interest when it is not;
- Incorrectly identifying an interest as a PMSI (Purchase Money Security Interest) when it is not;
- Incorrectly identifying the property the subject of the interest either by incorrectly referencing a serial number or not including a serial number when the Act requires its inclusion;
- Incorrectly identifying the debtor either by typographical error, or by reference to ACN as opposed to ABN and vice versa.
An ALLPAAP is a registration over all Present and After Acquired Property of a company and is a charge usually given in favour of a lender, rather than an ordinary supply creditor who would only have an interest in specific property/goods.
A PMSI (Purchase Money Security Interest) is a super registration that needs to be lodged prior to the supply of goods (or sometimes within 15 days: see section 62). A valid PMSI may entitle the registration holder to a priority for payment of funds over those with an ordinary registration despite that registration being registered prior to the PMSI.
Varied and numerous easily rectifiable mistakes evidently exist with regards to the PPSR which may deem a registration defective and thus invalid. It is therefore vitally important to check and then double check your registration has been done correctly in order to avoid costly and time consuming mistakes that will result in dire consequences at a later date.
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. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.