The PPSR is a national online register where details of security interests in personal property can be registered and searched. This protects buyers who can check the register before making purchases, as well as assisting businesses to recoup losses should a buyer or hirer of an asset, for example, default on payments.
It also provides a clear priority for interests over property (determined according to the type of registration and the time of registration) if the grantor becomes bankrupt or insolvent.
Whilst the duration of security interests varies, the most common registration period is seven years. This is also the maximum period of registration for goods with a serial number, such as motor vehicles.
The PPSR came into effect in January 2012 and, whilst two years’ grace was given for the transition, businesses and individuals were encouraged to promptly register their interests or be caught at risk. There were many high profile cases of businesses who did not protect their interests on the PPSR and faced severe hardship.
What does this mean for you?
Expired registrations cannot be renewed, only re-registered as a new interest. This means losing the original date of registration, allowing room for another interest against the same property to take priority over your own. The priority of a registration is important as it informs the order in which creditors are paid.
A lapse in registration will also put you at risk where an insolvency event occurs and your security interest is unregistered. You may lose your claim to that property altogether, even if you are the owner of the goods.
What do you need to do?
If you have a security interest registered on the PPSR, the seven year anniversary means it’s time to review your PPSR registrations and update them if necessary. You can get a free report on your registrations due to expire from the PPSR website at https://www.ppsr.gov.au/.
If you wish to keep your interest in any personal property, ensure you renew it before it expires.
If you have any questions about the PPSR or protecting your assets, please get in touch with us for assistance.