What is the PPSR?
The Personal Property Securities Register (“PPSR”) is the official government database of registered security interests over personal property in Australia.
The PPSR is most commonly used by a party to:
- 1. Register a security interest to notify the public that the party has a security interest over certain personal property, and to protect that security interest.
- 2. Search to see whether there are any registered security interests over certain personal property.
What is a security interest?
The Personal Property Securities Act 2009 (Cth) (“Act”) defines a ‘security interest’ as “an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation”.
For example, if one party borrows money from another party, the borrower might grant to the lender a security interest over one or more specific assets or all assets owned by the borrower, to secure repayment of the loan monies.
If a party has a security interest over personal property and the security interest satisfies the requirements under the Act, that party can register the security interest on the PPSR.
Why would my registration expire?
When a party registers a security interest on the PPSR, it must select the registration duration period. If the property that is subject to the security interest is consumer property (i.e. property held by an individual or described by a serial number), the registration period will be 7 years from the registration date.
Security interests over other property (other than consumer property) can also be registered for a period of 7 years however parties can also choose to register these interests for a period of up to 25 years or indefinitely.
Consequently, if you hold a security interest that was registered on the PPSR during 2014 and the registration period is 7 years, your security interest is due to expire this year.
What happens if my PPSR registration expires?
If your registration of security interest on the PPSR expires, it will be removed from the PPSR. You will then need to submit a new application for registration of the security interest on the PPSR.
An inadvertent expiration of a registration can have serious consequences such as you losing priority of interest over the subject property to other ‘competing’ secured parties. The expiration and re-registration of a security interest can also raise significant issues for the secured party’s interests if the party granting the interest goes into liquidation in the meantime, for example, loss of the secured nature of the interest entirely.
How can I prevent my registration from expiring?
We recommend that you review your PPSR registrations and diarise the date of expiration and a date approximately one month before the expiration date so that you have sufficient time to extend the registration, if necessary.
If you would like to speak to a member of our commercial team about the PPSR, or any other relevant matter, please do not hesitate to contact us on 03 9822 8588 or at firstname.lastname@example.org or email@example.com.
Insight Written By George Hanger