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Personal Property Securities Act

Personal Property Securities Act

The Personal Property Securities Act 2009 ("PPSA") introduced a new concept of "security interest" and regulates any "security interest" in "personal property".

The scope of what can constitute a security interest under the PPSA is wide-ranging. Most forms of tangible and intangible property, including all machinery and equipment, inventory, motor vehicles, shares, book debts, receivables, stock, crops, trademarks and patents are personal property.

If you do not protect your existing or future rights in personal property you risk losing your security interest in that property. By way of example, you could lose:

  • priority over secured property to another creditor; or
  • title to your property if it is left in the possession of someone else (e.g. if they sell it or if they go into liquidation, voluntary administration or bankruptcy).

The general rule of thumb is simple, if you own any personal property and it is not in your sole possession, then you need to protect your rights under the PPSA but registering a security interest on the national register.

Connolly Suthers can provide you with comprehensive and specific advices on the PPSA and can assist you with preparing, updating or amending any security agreement. A security agreement may include your business terms of trade, hire agreement, agistment agreement, or other form of agreement.

If you can answer yes to any of the questions below, you should contact us to discuss how the PPSA may affect you.

  • Do you own personal property that could be in someone else’s possession?
  • Do you consign goods to other people to sell?
  • Do you manufacture and sell goods?
  • Do your conditions of sale state that you retain ownership until you are paid (i.e. retention of title clause)?
  • Do you lease goods or chattels, whether on their own or as part of a lease of land?
  • Do you have security over a motor vehicle, boat or aircraft?
  • Do you have security over property which has serial number identification?
  • Are you involved in transactions under which debts are assigned to you?
  • Are your security agreements in writing?
  • Are your security agreements registered on existing registers?
  • Do you lend money or extend credit for the purchase of inventory or particular items of personal property?
  • Do you take security over intellectual property e.g. design, patent, plant breeder’s right, trademark?
  • Have you granted “fixed and floating” charges or have they been granted to you?
  • Do you deal in livestock, crops or equipment that is not in your possession?
  • Do you buy or sell personal property either with real estate or on its own?
  • Do you provide hire-purchase finance?
  • Do you include charging clauses in your standard documents to give you security for an obligation?
  • Do you take control of your customer’s bank accounts to secure obligations owed to you?
  • Does any existing agreement to which you are a party include provisions which create security over property to secure the obligations of a party under the agreement (i.e. joint venture agreements, shareholder’s or unitholder’s agreements, licensing agreements, franchise agreements etc)?

If your answer to any of the above is yes, it is likely that the PPSA will affect you. The list of examples is not exhaustive and any person or business that deals in personal property should carefully consider the impact the PPSA may have.

If you require further assistance with any matters relating to the Personal Property Securities Act 2009, please call or email: 

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