Personal Property Securities Act Blog

Securities Register saving thousands!

Last week we noted the one year birthday of the Personal Properties Securities Register. In a Media Release by the former Commonwealth Attorney-General, Nicola Roxon, Roxon welcomed the news that the Personal Property Securities Register (PPSR) now includes more than 7 million registrations and that more than 6 million searches have been made by users of the Register.

Roxon reiterated the importance of the new Register saying that “No one wants the bank repossessing their boat, car or machinery because they’ve been duped into buying property that someone else owes money on”.

“The Personal Property Securities Register has now been up and running for one year and serves as a one-stop-shop for people to check that the used goods they are buying don’t have a security interest over them.

“The Register gives additional protection for businesses that lease or supply goods, in the event that a debtor defaults or goes bankrupt.”

“Lenders are also more willing to accept different kinds of property as security because this resource makes it easier for them to check the goods and brings the property together under the same law.”

The PPSR has now rendered more than 70 Acts and Registers around the nation defunct, replacing them with a single, centralised, online register of interests in personal property. The online register is publicly accessible 24 hours a day, 7 days a week to consumers, businesses and the finance industry alike.

If you’re unsure if this legislation affects you can refer to the Government’s PPSA Key Facts Sheets, Frequently Asked Questions and Information Sheets and if you have any questions, please contact us.

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    Happy Birthday PPSR!

    “Today, 30 January 2013, marks the first anniversary of the Personal Property Securities Register (PPSR).”

    In the January PPSR Newsletter produced by the Australian Government’s Insolvency and Trustee Services Australia we are reminded that twelve months ago the PPSR became a national online register of personal property securities for consumers, businesses and the finance industry to access 24 hours a day, 7 days a week.

    Among the statistics noted in the update is a mention of the PPSR being cited as an example of an initiative taken to strengthen the legal rights of borrowers and lenders in 2011 / 2012 in the World Bank’s report “Doing Business 2013 – Smarter Regulations for Small and Medium-Size Enterprises”.

    It’s important to note that even though the PPSR legislation has been operational for 12 months many businesses are still getting caught out. Under the legislation, companies must protect the payment and ownership rights of assets that they put in the possession of another person or business by registering them on the Personal Property Securities Register (PPSR).

    If you’re unsure if this legislation affects you please read review the Government’s PPSA Key Fact Sheets, Frequently Asked Questions and Information Sheets and if you have any questions, please let us know.


    Personal property includes all forms of tangible and intangible property except land, fixtures, water rights and certain other statutory exceptions.  In the case of your day to day business it may include motor vehicles, furniture, artworks, inventory and stock, shares, plant and machinery, accounts receivable, intellectual property and many other things.

    Importantly, business owners need to be aware of the changes and may need to take further steps to protect their rights and interests (where previously they did not need to do so).  In particular, the changes can affect arrangements such as the supply of goods on:

    • lease
    • consignment, or
    • retention of title arrangements.
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      Businesses still in the dark over PPSA – new regime forces business owners to abandon traditional concepts of ownership

      Despite the Personal Property Securities Register having come into effect in January this year, the Personal Property Securities Act (2012) is still a mystery to many businesses, who are unaware or yet to grasp the potential risks of the new legislation. Under the legislation, companies must now protect the payment and ownership rights of assets that they put in the possession of another person or business by registering them on the Personal Property Securities Register (PPSR).   

      The new regime forces business owners to abandon traditional concepts of ownership and reliance on retention of title clauses in their contracts to adequately protect their interests. While many companies have heard of the radical changes, a significant number are yet to take the required measures to ensure compliance, leaving themselves open to potentially devastating consequences if other businesses that they transact with on a day to day basis become insolvent or on-sell their property to a third party as explained in the article ‘Businesses still in the dark over PPSA’ where valuable practical advice for business owners is offered.

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        Personal Property Securities (PPS) Stakeholder Update

        Insolvency and Trustee Service Australia (ITSA) have just released the latest PPS Stakeholder update. ITSA continues to record feedback on the PPSR in an ‘enhancement log’ for future upgrades. Cycle 2 of User Acceptance Testing is due to commence. Testing will be based on Business to Government functionality including enhanced reporting and compilation of multiple search results in a single PDF document.
        The following new Fact Sheets have been released:

        The above Fact Sheets and other Fact Sheets are available on the PPSR website
        We continue to get a lot of feedback from clients about the confusion surrounding the PPSA generally and also in navigating around the PPS Register.  It’s encouraging to see ITSA is actively engaging with industry to improve the Register and provide clear guidance as to the application of the PPSA.
        We will endeavour to keep you updated, however, if you have any questions please let us know.

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          PPSA and Fixtures

          Following my last update on the PPSA and its impact on suppliers and distributors of goods, I thought I would explore fixtures in a little more detail.

          The exclusion of ‘Fixtures’ from the operation of the PPSA is a matter of great concern, and confusion.  When personal property is affixed to land it ceases to be the subject of a security interest under the PPSA because it forms part of the land and is therefore excluded from the operation of the PPSA.

          During a recent presentation I gave on the PPSA and its impact on suppliers and distributors of goods, delegates asked the following questions, highlighting some of the the issues for suppliers and distributors.

          Q.  Would the supply of an irrigation system once installed, be regarded as a fixture?

          If the irrigation system is in the ground it will be a fixture.  If it is above ground and detachable it probably is not a fixture.  Whether something is a fixture or not depends on tests in the case law.  In summary, an item would become affixed to land when the object and the degree of the annexation means that the item becomes part of the land.

          The object or purpose of the attachment is relevant:

          • Has the item been affixed permanently or merely for a temporally purpose?
          • Has the item been attached to improve the land or buildings on the land or for better use of that item?

          The degree of annexation refers to how the item was affixed.  How securely or permanently has it been affixed and the damage that would be caused to the property or the item by its removal.  There is case law that has held that sewer and water pipes, and underground tanks are fixtures.

          Q.  Does a vending machine business have to register each machine ID, each location & each client name to protect ownership title to each vending machine?

          I assume that the vending machines are leased or hired for a term exceeding 1 year.  The definition of a PPS lease relevantly provides:

          ‘13(1)    A PPS lease means a lease or bailment of goods:

          (a) for a term of more than one year; or

          (b) for an indefinite term (even if the lease or bailment is determinable by any party within a year of entering into the lease or bailment); or

          (c) for a term of up to one year that is automatically renewable …; or

          (d)  for a term of up to one year, in a case in which the lessee or bailee, with the consent of the lessor or bailor, retains uninterrupted possession of the leased or bailed property for a period of more than one year after the day the lessee or bailee first acquired possession of the property …’

          If the vending machines are leased/hired to different grantors then a separate security interest will need to be registered on the PPSR in respect of each grantor.  It would be registered under the collateral class of ‘tangible property – other goods’.  It would be prudent to insert in the free text field particulars of the location of each vending machine.

          If multiple vending machines are leased/hired to one grantor, and there is insufficient space in the free text field (which takes up to 500 words), an attempt should be made to give the best description possible.  It may be possible to attach a schedule to the registration even though it is not an intention of the PPSR to be a document lodgement system.

          Q.   We supply structural timber for houses.  If this then becomes a fixture and part of land, can we protect our interest/ title?  In relation to the supply of timber, what about proceeds?

          The timber will become a fixture and as such form part of the land.  The PPSA does not apply to land.

          The security interest will attach to the ‘proceeds’ in respect of the sale of the timber when received.  The use of the timber for building purposes necessarily would give rise to either express or implied authorisation that the timber would in effect be disposed of (by becoming a fixture to land) in the same way that goods supplied to a retailer are disposed of when they are sold to a customer.  In this situation Section 32 says that the security interest ‘attaches to the proceeds, unless the security agreement provides otherwise.

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