Personal Property Securities Reform FAQs
Personal property is any property other than real property (i.e. land, buildings and fixtures) and some property exempted from the PPS Act (e.g. some statutory licences issued by the States and Territories). It includes tangibles such as plant and equipment, goods, crops and livestock, and intangibles such as licences, investment instruments, negotiable instruments and accounts. For a definitive explanation of what personal property is and what it is not - refer to the Attorney-General's website.
A charge over a motor vehicle that secures a personal loan is a common example of a security interest. Some other examples of security interests covered by the PPS Act include a charge over all of the assets of a business, a chattel mortgage or finance leases over equipment, commercial consignments (including retention of title arrangements) and the factoring of book debts. Individuals are able to offer as collateral any item of their personal property including cars, yachts, paintings and shares.
Businesses also own personal property such as machinery, inventory and accounts receivable, and can offer them as collateral. They can borrow money against all the property they currently own or may own in the future – such as their inventory and future cash flow.
Previously, the law and practice about personal property securities was complex and difficult to navigate. The Commonwealth, States and Territories all had their own security registers. In all, there were more than 70 Commonwealth, State and Territory Acts regulating personal property securities and around 33 registers. Enforcement rules were also complex and varied, depending on asset classes, locality and circumstances. When disputes arose over personal property security, it was often time-consuming and costly to figure out who was entitled to what.
Greater certainty about whether an item of personal property is subject to a security interest may increase the availability of finance for business, and may reduce the costs.
As never before, individuals will be able to use their own personal property as security for credit for their businesses.
A Notice of Verification Statement details when a PPS security interest has been registered, amended or discharged. It is sent to the Grantor of the security interest (that is, you) unless a waiver has been provided where possible, or the PPS Act does not require it to be sent.
Existing security interests on old registers, e.g. REVS, are being migrated to the national PPS register by 27 January 2012. This is being done by the Attorney General’s Department as part of the PPSR project. If you are an existing customer, you are not required to take any action.
If you have a personal property security with us which was never on any such register, such as a lease or items under hire purchase agreements, we may create a registration on the PPS Register.
There will be a new fee structure to match the new processes for registration, searching, amending and discharging security interests. Charges will vary, with some reductions, and in some instances fees will be packaged and simplified.
More than one lender may have a security interest over the same collateral. Priority is determined by a number of factors. “Perfection” is required to confer the highest priority under the new system, and unperfected interests are subordinate to perfected ones.
If we have entered that information on the register, you may contact your Relationship Manager and ask for an amendment to be made.
Be aware that it is important to provide particulars correctly at the outset, as some registrations cannot be amended. In those cases, the only option is to make a replacement registration and discharge the existing one, which will attract additional costs.
You need to contact the other institution and ask them to remove their registration or, alternatively, ask them to provide a Deed of Release that meets our requirements.
No. If the wrong serial number is registered, the registration will not be valid. Our security over your property is wrongly recorded and no protection is provided to us by the PPS Act. Incorrect Vehicle Identification Number (VIN), Hull Identification Number (HIN) or other serial number means ineffective registration for all vehicles and boats that are consumer property and for all aircraft. It is not possible to simply amend our registration to correct the VIN, HIN or other serial number. . The registration will have to be discharged and a new one made.
This is important, as there will be no provision for searching or registering an interest in a vehicle by plate or engine number on the PPS register.
The Personal Property Securities Act 2009 deals with privacy issues for grantors, secured parties and other members of the public.
For further information on the Personal Property Securities Register visit the Commonwealth Attorney General Department’s website.