10 December 2013 | Reading time: < 1 minute
A string of acronyms.
PPSA, PPSR, PMSI – leaving aside the sometimes confusing, and frequently tongue twisting terminology, many of us are now well aware of the difficulties posed by the registration of security interests in personal property, pursuant to the Personal Property Securities Act 2009 (Cth) (PPSA).
Neither a borrower nor a lender be.
The introduction of the PPSA saw the replacement of a number of laws across federal and state jurisdictions in Australia. The now consolidated position in Australia under the PPSA is that a party with a security interest in personal property bears the responsibility of ensuring that its interest is perfected, by registration on the Personal Property Security Register (PPSR). If this is not done properly then the party with the security interest (eg lender or landlord) may not be able to enforce its interest against third parties (eg liquidators) in circumstances of insolvency of the party to whom the security interest was granted (eg borrower or tenant).
Dotting ‘i’s and crossing ‘t’s.
In order to prevent problems with security registration, the party with the security interest should make sureall the correct boxes are ticked, and details approved on the relevant forms. This includes ensuring that all of the secured party’s details are entered correctly and that the correct type of collateral is chosen. Particular attention should be given to whether the security interest claimed is a Purchase Money Security Interest (also known as PMSI).
A date for your diary.
When the transitional period under the Act comes to an end on 29 January 2014, a party will not be able to rely on the transitional provisions to suggest that it has a deemed security interest in the personal property.