PPSA Transitional Period Coming to a Close
By Marianne Marchesi, Lawyer, MST Lawyers
The transitional period under the Personal Property Securities Act 2009 (Cth) (‘PPSA’) ends on 30 January 2014. It is imperative that security interests created prior to the introduction of the PPSA are perfected before this date. Failure to do so can affect priority and may have significant consequences for your business.
The transitional period is a grace period for security interests created prior to 30 January 2012 (the date that the PPSA came into effect). This period was to give security holders the opportunity to properly protect their security interests by ‘perfecting’ their security interests, for example, by registering them on the Personal Properties Security Register (‘PPSR’). In some cases, security interests may have migrated (transferred) to the PPSR from an old register, such as the Register of Company Charges.
What do you need to do?
For security interests that have migrated to the PPSR, security holders should check that the details of the registration are correct. A ‘find and claim’ process is available whereby security holders can search the PPSR for their migrated secured party groups and associated registrations. The registrations should then be claimed and the details of each updated, particularly with the security holder’s address for service.
For all other security interests that have not migrated, these should be registered on the PPSR to ensure protection following 30 January 2014. Examples of interests that may need to be registered include:
- retention of title supplies
- leasing arrangements
- hire purchase arrangements
- chattel mortgages
What happens next?
The provisions of the PPSA will apply in full force after 30 January 2014. This means that security holders that have not perfected their security interest on the PPSR risk these security interests ranking behind those of other creditors, irrespective of ownership and irrespective of which security interest was created first.
For more information about the find and claim process or registering security interests on the PPSR, please contact our experienced Corporate Advisory and Franchising team on (03) 8540 0200 or by email email@example.com.