As it has almost been seven years since the start of the Personal Property Securities Register (PPSR), this article will discuss the implications of lapsing personal and business security interests. We highlight key implications about not having your security interests protected and how the team at Rostron Carlyle Rojas Lawyers can assist.
What is a PPSR security interest?
The Personal Property Securities Act 2009 (Cth) (PPSA) came into effect on 30 January 2012, incorporating a national online register of security interests for personal property known as the Personal Property Securities Register (PPSR). The PPSR allows banks, financial institutions, businesses and individuals to register a security interest against personal property. The federally administered register was the first of its kind, and became a critical mechanism in protecting personal and business assets by allowing a priority charge to be held over a specific asset.
Which security interest registrations are affected?
PPS registrations against consumer property with serial numbers (such as your motor vehicles, boats or business machinery equipment) only allows such items to be registered on the Personal Property Securities Register (PPSR) for a period of seven years. As the PPSR this year celebrates its 7th birthday, it will be a short-lived celebration if those security interests registered at the commencement of the PPSR, have not been amended or re-registered.
As at 30 January 2019, over 120,000 registered security interests were set to expire.
To save these registrations from expiring, the secured party, being the party whose interest is being secured, must amend or create a new registration before the expiry of the original registration.
Consequences of a lapsing PPSR security interest?
If a PPS registration is not renewed, the security interest will expire, and the secured party will lose its status as a secured creditor.
PPS registrations are designed to protect personal and/or business interests, to allow recovery of property or valuable assets should the other side in the transaction being the grantor, become a bankrupt or enter into liquidation.
Accordingly, allowing your PPS registration to lapse or expire could have significant consequences. Regardless of when your security interests were registered on the PPSR, now is the time to ensure your rights are protected. To avoid losing your security interests and priority, we encourage you to check the status of your registration by generating a ‘registrations due to expire report’ using the PPSR website.
How can we help?
Find this area of personal and/or business security interests confusing? If you have questions about a potential expired registration or want to know whether your personal and/or business security interests are still protected, please contact the team at Rostron Carlyle Rojas Lawyers on (07) 3009 8444 or email us at [email protected]
Please note that this article has been prepared by Jakob Mignone, Law Clerk and settled by Sarina Mari Alwi, Associate of Rostron Carlyle Rojas Lawyers. Its contents are for general information purposes only and does not by any means constitute legal advice, nor should it be relied upon.