What is the PPSA?
The PPSA commenced on 30 January 2012 and formed a single point where security interests in respect of personal property can be registered.
By registering and ‘perfecting’ your interest in your personal property you can then enforce it against others who may claim to have a security interest in the same personal property. Failure to follow this process may result in a loss to you when a subsequent transaction involving the personal property takes place.
Real estate implications
You may not be aware of the need to register certain interests on the PPS register, and are therefore at risk of losing your rights to your personal property.
Set out below are just a few examples of interests which should be registered:
- Abandoned goods clauses in leases: most leases contain a provision which allows the landlord to retain and sell abandoned goods left by a tenant to secure payment for outstanding rental arrears or other financial obligations. The interest granted in this clause in favour of the landlord is likely to be treated as a security interest for the purposes of the PPSA.
- Tenant’s fixtures in a premises: the PPSA will not apply to the lease of the premises, however if the leased property includes items of plant and equipment that are owned by the landlord and are not fixtures, the lease of those items may be regulated by the PPSA. The landlord may register its interest so far as its interest relates to the leased property.
- Joint venture agreements: interests arising under cross charges and some default clauses in joint venture agreements will fall within the PPSA regime and will need to be reviewed.
What’s the next step?
The PPSA is here and demands careful consideration by participating businesses in the property sector. There is a two year transitional period in place (which we are now over half way through!) that affords all parties an opportunity to register their existing security interests on the PPS Register.
We consider that education and compliance are important in managing how this new regime affects your business operations and processes. Early identification of areas of application is essential to you and your business.
For more information
Redchip are working closely with all of our clients to identify areas of their business affected by the PPSA. We have developed procedures to help you deal with the introduction of the PPSA, including assisting you in registering security interests on the Personal Property Securities Register.