Paul Anderson | November 2013 | Commercial Disputes and Transactions
The Personal Property Securities Act 2009 has been in force since 30 January 2012. To what extent does the Act impact upon landlords?
Who does this affect? Landlords, tenants and their advisers.
Overview of PPSA The PPSA came into force on 30 January 2012. It provides for all security interests in respect of personal property to be registered in one central registry called the Personal Property Securities Register or PPSR. As such, the PPSR replaces some 70 separate state and territory registries and 40 pieces of legislation.
What action should be taken?
Existing registrations on the 70 separate registries were automatically migrated to the new PPSR on the starting date.
A landlord should register under the PPSA every security interest in respect of a long term lease of personal property associated with a lease of premises.
Priorities are determined by date of registration. If two security interests compete in respect of one item of personal property, the first to be registered will prevail.
The Personal Properties Securities Act 2009 or PPSA has been in force for more than 18 months and represents one of the most significant reforms in Australian commercial law for many years. The only comparable reform in terms of impact in recent times would be the introduction of the GST in the year 2000.
The process of registration is internet or electronic based and is paperless. The process involves registration of a ‘financing statement’ in respect of each security interest.
However, despite its importance, there is a widespread lack of knowledge in the community not only as to the operation of the Act but as to its very existence. The aim of this paper is, firstly, to give a necessarily brief overview of the PPSA, and, secondly, to explore its impact upon landlords.
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PPSA and Landlords
Section 267 of the PPSA deals with failure to register a security interest. If the grantor of the security interest goes bankrupt or is wound up, then an unregistered security interest will be void as against the trustee in bankruptcy or liquidator.
New security interests In many instances, the new regime will have little impact at a practical level. Instead of registrations in one of the 70 old registries, a secured party now registers in the PPSR. For example, a finance company taking a mortgage over a motor vehicle used to register in REVS but now registers in the PPSR. A bank that takes a Fixed and Floating Charge over its customer’s assets and undertaking used to register it at ASIC but now registers a General Security Agreement in the PPSR.
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