What is the PPS Register?

Written on the 3 May 2012

You might have heard the advertising about the Personal Property Securities Act (PPS Act) and the national register that opened on 30 January 2012.  But with a title like that it’s easy to think that the Act and the register are not something that the majority of us need to worry about.  

But, if you intend to: borrow money against an asset; provide goods on consignment or on credit; supply goods under a lease arrangement (or enter into a leasing arrangement); buy a business; or, buy personal property (excluding land), the PPS Act and register will impact on you. 

The PPS Act introduced a new way of recognising and enforcing security interests in Australia.  A security interest is created when you buy personal property on hire purchase or use personal property as security for a loan or other type of credit transaction.

Not only does the PPS register replace the State based security registration systems but it expands the type of personal property that can be registered as a security interest.  For example, if you are buying personal property like a second hand car, you can check the PPS register before purchasing it to see if there are any security interests attached to it.  In business, the register will be a way of protecting your interests in a broad range of situations.  Boats, machinery, crops, shares, art, intellectual property and contract rights can all be offered as security for a loan and where this occurs, will need to be registered.

While registration is voluntary, it is important to understand that if a security interest is not registered and your customer goes bankrupt or insolvent, you can no longer rely on retaining title to reclaim the goods.   If it’s not on the PPS register, you may not get your property back in these circumstances.  So, you need to weigh up the risks and register any relevant property before supplying it.

For many businesses, the first step will be to review your current situation and note your security interests and property subject to a security interest.  Then, register any applicable interests and review any existing registrations for accuracy.  When you discharge a debt over personal property, you may want to make sure that the register reflects this.

And of course, fees apply to registering an interest, obtaining certificates and searching the register.

You can access the PPS register at http://www.ppsr.gov.au.