Fact Sheet – Personal Property Securities Act 2009

This fact sheet is not a substitute for legal advice. You should seek specific advice for your circumstances.

If you are involved in any of the common arrangements set out below, you should consider the implications of the Personal Property Securities Act 2009 (Cth) (PPSA). You may need to take additional steps to ensure that your interest in personal property (property other than land, for example, grain, livestock or machinery) has the strongest legal protection.

Failure to take such steps may mean that your interest is unenforceable against third parties and you may lose your interest in such property.

Leasing personal property

If you lease, bail or consign personal property then you must consider the PPSA, which now regulates many such arrangements. To protect your interest in the property as lessor, bailor or consignor you may need to take further steps than were required before the PPSA. Failure to do so may have significant (and counter-intuitive) consequences. For example, a lessor may lose their property where the lessee becomes insolvent / bankrupt.

Selling personal property on retention of title / conditional sale type arrangements

If you sell personal property using retention of title / conditional sale type arrangements then you need to take further steps under the PPSA to best protect your interest. Such arrangements are no longer effective protection against buyer default without taking these further steps.

Share farming / financing crops

Share farmers or financiers can take a security interest over crops. If you grow crops on a third party’s land, or finance crops, you should consider the requirements of the PPSA for taking a security interest over the crop. Complying with the PPSA will best protect your interest in the crop, particularly on the land owner’s insolvency / bankruptcy.

Lending money to finance personal property

If you plan to lend money to a party to fund the purchase of personal property, you need to take steps under the PPSA to secure the loan and ensure that security retains the best available priority.

Purchasing property

The PPSA has consolidated a range of state, territory and federal registers into the single, online Personal Property Securities Register. You can search this register to identify whether personal property is encumbered or otherwise subject to a security interest.

In most of the situations outlined above, you need to register your interest on the online Personal Property Securities Register. The Register is accessible by anyone. However, given the importance of the Register tothe PPSA scheme, we recommend seeking professional assistance with registration and searching, to avoidunintended results.

Other Considerations

The sale of personal property can have implications for the following:

  • Capital Gains Tax;
  • Wills; and
  • Estate planning.

Feel free to discuss any of these issues with us at any stage.

Commins Hendriks can do your registrations and searches for you and provide advice about the impact of the PPSA on your business activities.