Com­mence­ment of PPSA to be delayed

In brief – PPSA due to com­mence in Octo­ber 2011

In a recent devel­op­ment, the com­mence­ment date of the Per­son­al Prop­er­ty Secu­ri­ties Act 2009 (Cth) (PPSA) has been delayed from May 2011 to Octo­ber 2011. The defer­ral of the com­mence­ment date is the result of indus­try requests for more time to prepare.

Estab­lish­ment of a secu­ri­ties register

The PPSA is new leg­is­la­tion which will exten­sive­ly change the way in which secu­ri­ty inter­ests in per­son­al prop­er­ty are dealt with across Aus­tralia. The leg­is­la­tion will lead to the cre­ation of an online Per­son­al Prop­er­ty Secu­ri­ties Reg­is­ter in which any hold­er of a secu­ri­ty inter­est must reg­is­ter their inter­est to ensure they have a pri­or­i­ty claim to it.

What is cov­ered by the PPSA

Per­son­al prop­er­ty cov­ered by the PPSA is any form of prop­er­ty oth­er than water rights, land and build­ings or fix­tures which form a part of the land. It includes tan­gi­ble and intan­gi­ble prop­er­ty such as motor vehi­cles, equip­ment, busi­ness and retail stock, crops and live­stock, intel­lec­tu­al prop­er­ty, licens­es, house­hold items and finan­cial instru­ments such as shares.

What will change under the PPSA

Some of the changes that will occur under the PPSA are that:

• Financiers will be required to mod­i­fy secu­ri­ty doc­u­ments and pro­ce­dures in rela­tion to charges, mort­gages over all prop­er­ty (oth­er than land), vehi­cle and equip­ment leas­es and hire pur­chase agreements
• The com­pa­ny charge reg­is­tra­tion sys­tem under the Cor­po­ra­tions Act will be replaced and the con­cepts of a float­ing charge and crys­talli­sa­tion will be redundant
• State and ter­ri­to­ry reg­is­tra­tion sys­tems for motor vehi­cle and boat encum­brances and for bills of sale will be replaced
• Secu­ri­ty inter­ests which have been giv­en by indi­vid­u­als and which could not be for­mal­ly reg­is­tered in the past will now be reg­is­tra­ble and will be sub­ject to a statu­to­ry pri­or­i­ty and enforce­ment régime
• Rights of man­u­fac­tur­ers and sup­pli­ers in respect of con­sign­ments and reten­tion of title arrange­ments will con­sti­tute secu­ri­ty inter­ests that will need to be reg­is­tered to min­imise the risk of being defeated
• The PPSA will have a sig­nif­i­cant impact for all Aus­tralian busi­ness­es and indi­vid­u­als that hold secu­ri­ty inter­ests in per­son­al prop­er­ty. It will be nec­es­sary to pre­pare for the new régime well in advance.

For detailed infor­ma­tion about these changes in law, please see our ear­li­er arti­cle Per­son­al Prop­er­ty Secu­ri­ties Act 2009 – Rethink­ing the notion of own­er­ship.

Please do not hes­i­tate to con­tact Tean Kerr or Georgina King if you have any ques­tions or would like advice on the PPSA and how best to pre­pare for it.