Long Saad Woodbridge

Do I Need to Register a Security Interest on the Personal Property Securities Register (PPSR)?

The PPSR is the Australian national register for recording security interests other than in relation to land. You can register a security interest over personal property, for example, motor vehicles, stock, and financial property such as shares. Most commonly a security agreement for the repayment of a loan will give rise to the need for registration of a security interest on the PPSR. It can be in relation to a specific piece of property, for example, a motor vehicle, or it can be in relation to all personal property the person granting the security (grantor) has an interest in at the time of the registration and after the security interest is registered. Similarly, those who supply goods on credit to their customers will often enter into a supply contract and lodge a security interest over the customer’s property to ensure their interest in the supplied goods on credit are protected in situations such as the customer becoming insolvent. Why Do I Need to Register a Security Interest? It is important to register a security interest as it secures payment of a debt or other obligation. It ensures your security interest is valid and enforceable in the eyes of the law. It gives you priority over other’s who may register a security interest after you. In the event that you have not registered a security interest on the PPSR and a third party purchases the property which should have had a registered security interest over it, you risk no longer being able to recover payment. With some exceptions, priority is generally given to security interests which were registered the earliest. Therefore, we recommend attending to registration of your interest on the PPSR as soon as possible. It is noteworthy that some types of security interests require registration to be recorded within time frames stipulated by the Personal Property Securities Act. These timeframes vary depending on the type of security interest and, while it is still possible to register your security interest after expiration of the stipulated timeframe, the security interest may not be ‘perfected’ after the timeframe has expired. As a result, where registration is delayed, a security interest may be more difficult to enforce against the customer and third parties (including on insolvency) if and when needed, especially if there are other security interests registered against the customer or third party when the claim is made. Registering a security interest is a fairly simple process, however it must be conducted with precision as an incorrectly registered security interest may be held to be invalid, leaving you potentially unprotected.

To enforce your rights in accordance with a registered security interest, unless specific procedural requirements are set out under a security agreement between yourself and the grantor, you, as a secured party, are entitled to seize the secured property. You must first provide at least 10 business days’ notice to the grantor and any secured party with a higher priority interest registered.



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