|
Personal Properties Security Bill 'PPSB'
What is the PPSB about?
The PPSB governs security interests in personal property. Personal property is defined broadly and encapsulates virtually any asset bar real property (land and buildings). These assets include both tangible (ie: boats and motor vehicles) and intangible assets (ie: shares and leasehold interests)
The PPS Laws will commence in May 2011.
What is a Security Interest?
A security interest is an interest in personal property that covers the use of personal property to secure payment or performance of an obligation.
When will the PPS laws be relevant to you?
- hire / purchase transactions
- goods sold on your behalf by a retailer
- leases of goods or equipment
- goods stored in someone else’s possession
The New Personal Properties Securities Register:
The Personal Property Securities Register (“PPSR”) will be a national public register where security interests over personal property will be registered. This will enable people dealing with security interests to check whether another interest is held over the personal property.
The advantage of registering your security interest in the personal property is if the owner of the property does go bankrupt or is put into receivership or liquidation, then you will be in a better position to recoup payment as a registered debtor.
If however there is more than one registered security interest over an asset then priority will be given to the interested that was registered first. It is also important to note that if a person has possession or control over the property then they will have the priority interest over a person with a registered or unregistered interest.
Why Change Existing Agreements?
Prior to the existence of this bill, agreements relating to the supply of goods on credit contained what is known as ‘retention of title’ clauses. Retention of title clauses prevent the transfer of title for personal property until the entire value of the goods is paid to the supplier.
In May of this year, retention of title clauses will no longer be effective against third party claims, meaning that if you have not registered an interest on the PPSR you will become an unsecured creditor if your debtor becomes bankrupt.
Questions to ask yourself!
| Q: |
Does my company supply goods on commercial consignment? |
| A: |
Without registering such an interest on the PPSR you or your company will be an unsecured creditor and unable to retrieve your assets if the retailer goes into liquidation or receivership. |
| |
|
| Q: |
Do you supply goods under a lease for a term of more than one year or for an indefinite period? |
| A: |
Again if you fail to register such an interest with the PSSR and the company goes bankrupt then you will be vulnerable as all unsecured debtors would be in this situation and those secured debtors could in fact reap the rewards from the sale of your unregistered asset. |
Further information and assistance can be sought from Aidan Wollner by calling our office on 9670-5000 or by his email awollner@mdlaw.com.au
|
Privacy Policy 