The PPS Register turns 7 – Security holders, check your registrations!
This hot-topic comes as a timely reminder as we approach January 2019 – a milestone date for the Personal Property Securities (PPS) Act, as it has now been seven years since the PPS Register went “live”.
Every business that made seven year registrations will now see them start to expire from 30 January 2019 onwards. Businesses that selected seven year registrations early on when the PPS Register was introduced must take note as their registrations approach expiry. There can be grave consequences for lapsed registrations.
According to the Australian Financial Security Authority, most registrations on the PPS Register are seven year registrations. The seven year registration option is most popular for securities in respect of sale of goods / inventory, short term loans, equipment rentals and other short term transactions, and it is the maximum time frame for all registrations over serial numbered goods, such as motor vehicles, aircraft, watercraft etc.
Security holders should–
- Start checking existing registrations and diarising expiry dates – do not rely on your agents or the PPSR to remind you;
- If a registration is about to expire, consider whether an extension is required or whether the registration can be allowed to lapse; and
- If registration is required beyond the existing date of expiry, take steps and ensure that an extension of the registration is completed before the registration expires so that protection is continuous.
A word of warning, any lapsed registration cannot be extended or renewed further. In the case of a lapsed registration, protection for the security holder will be interrupted. Any new registration made after the lapsed registration may mean that the security holder may lose priority to another secured party already on the register.
Extending or renewing an existing registration is relatively straightforward. To do so, you will need credentials including your secured party group number, registration number and token details to log into the PPSR online, select the extension period and pay the applicable fees.
Security holders can access a free PPSR report called “Registrations due to expire report” which produces a report that lists registrations due to expire for your secured party group. A link to this free service is here.
If you need any advice on the PPS regime or help making any PPS registrations or extensions, please do not hesitate to contact Kelly Dickson, in Victoria, Malcolm McBratney in Queensland and Chelyn Murphy in New South Wales.
This article was written by Aylmer Low, Lawyer – Commerical