Are your registrations secure? Act now

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Are your registrations secure? Act now

We have previously discussed the introduction of the Personal Property Securities Act 2009 (Cth) (PPSA) which established a national centralised system for recording and enforcing security interests in personal property. Click here to view the previous article.

Those interests are recorded on the Personal Property Securities Register (PPSR). The PPSR allows secured parties, grantors and other interested third parties to determine the priority of competing interests relating to the same collateral.

The PPSA deals with transitional security interests, which are essentially those interests that secure payment or performance of an obligation existing prior to, or created under an agreement existing prior to, the commencement of the PPSA (30 January 2012). These transitional interests were temporarily transferred to the PPSR, pending the secured parties claiming those interests (the transitional period). In effect, this ensured the priority of those pre-existing interests.

The transitional period ends at midnight on 31 January 2014.

If you have, or suspect that you may have an interest that was created prior to the PPSA and you have not yet registered that interest on the PPSR you need to act now. Failure to complete the registration before the end of the transitional period will mean that the priority status of your interest will not be preserved.

What does that mean?

You will still be able to register your interest on and from 1 February 2014, but the registration will rank in priority subsequent to any interest that has been recorded before yours. If another person registered an interest in the same collateral (the same particular or class of goods, motor vehicle etc.) during the transitional period and you do not preserve your priority (by registering it on the PPSR for example), you will be ranked and thus be paid second in priority (or potentially not at all) in the event of a default of insolvency of the grantor.

Please contact our office without delay if you need assistance with finalising your security interests or if you have any questions.

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