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.