Personal Property Securities Register - The Importance of Registration

When is possession 9/10ths of the law?

Find out how you could be in danger of losing assets – and not even know it. Under the PPSA (Personal Properties Securities Act), you need to hold a "perfected security interest" on leased equipment before your interest in the asset is secure.

Example
Let’s say you want to lease a trailer out to your customer, James, on a long-term lease.

In addition to your standard leasing agreement you need to hold a perfected security interest in the trailer by registering a financing statement on the Personal Property Securities Register (PPSR) either before James takes the trailer or within 10 days of him taking it. 

Why this is Important
If James becomes insolvent while he’s got your trailer, his creditors through the Office Assignee in bankruptcy (or through a liquidator or receiver if James was a limited liability company) will only be bound by the charges that are registered on the PPSR. 

So, if James owes money to a bank, they will probably hold a perfected security interest over all James’ “present and after acquired property”, including your trailer.  Unless you hold a perfected security interest in the trailer you could find yourself in line behind the bank trying to retrieve it, even though you own it.

Registration on the PPSR is easy and inexpensive but it must be done properly. Inaccurate or incomplete registrations can be deemed invalid.

Mackenzie Elvin can assist you with all aspects of PPSR registration including the preparation or review of your terms and conditions of trade or any leasing arrangements to ensure that your assets are fully protected.