The Personal Property Security Act

Review your group structure, paying specific attention to agreements between entities, including leases and loans. This is particularly important due to the irrelevance of "title" under the Act. If security over property has not been correctly "perfected" by a related entity in the PPS register, separating entities may not protect your assets as they previously did.

Review your terms of trade if you supply inventory to other entities, especially if you have retention of title ("ROT") clauses in your contracts. If you have ROT clauses, ensure that these terms are in writing, signed by a person with appropriate authority and that the terminology accords with the concepts in the Act.  These signed agreements should be in place before the supply of goods. Implied terms will not be sufficient to ensure priority under the Act.

Review your existing financing arrangements for registered and unregistered security interests. These may include financing and operational leases, consignment arrangements, personal/directors' guarantees, loans secured against personal property (e.g. motor vehicles), margin loans and factoring of accounts receivable. 

If you sell goods with ROT terms or on consignment,  you should register existing arrangements in the PPS Register. The period of registration  (up to 7 years, 7-25 years or indefinite) will depend on whether you will have future transactions with the buyer and whether you want to register each time you make a sale. Sellers are able to register a single registration against buyers for multiple future sales. 

If you lease or bail personal property to others for more than one year (or indefinite periods), you should register existing arrangements in the PPS Register. If you lease real property to others, you should ascertain if personal property is included in these leases. If so, you will need to register these as a security interest. Ensure that all lease agreements are in writing, signed by a person with appropriate authority and that the terminology accords with the concepts in the Act.   

If you lend money or secure obligations, ensure that your security documents accord with the concepts in the Act. Register the interest on the PPS register.

Review your credit policies for new customers and develop standard PPS registration procedures to be implemented. This may include but not be limited to: 

• amend your credit policies to ensure that you are collecting the information necessary to  register your retention of title arrangements;
• have existing and new customers sign a written agreement accepting your terms of trade;
• review documents provided to customers, including credit applications, invoices, quotations and terms and conditions to ensure they clearly establish a security interest that is capable of  registration and, where possible, include clauses to minimise your obligations under the Act; 
• determine the procedure of your business for identifying and registering security interests on a timely basis; and
• ensure staff are trained, and systems are in place in preparation for these changes. 

Check the PPS Register to ensure that all security interests recorded on another register have been successfully migrated to the PPS register. If the security interest is missing or incomplete, contact the PPS Contact Centre on 1300 007 777 to determine what action may need to be taken. 

If you buy goods:

• Suppliers may seek to register security interests against you. Check these registrations regularly and ensure that they do not put you in breach of any bank covenants or clauses.
• You may also be asked to sign new terms of trade which, unless carefully reviewed, may override your own terms of trade and prevent them from having any effect.
• If you buy a motor vehicle or other significant goods, search the PPS Register to see whether anyone has registered a security interest in the goods. If you discover an entry on the PPS Register, consider whether you should proceed with the purchase or alternatively you might negotiate with the vendor to either have the registration removed or to reach an agreed adjusted price that reflects the continuation of the security interest in the goods.

Create a secured party group by going to the PPSR website and submitting details of your organisation including names, addresses and phone numbers. Record the secured party group number and access code. 

Create a registration on the PPSR website. You will need the following information to  create a registration:

• Collateral type - consumer or commercial (consumer property is property held by an individual and not held in carrying on a business).
• Your secured party group number.
• The class of collateral (e.g. motor vehicle)  and a description including serial number, if applicable.
• Duration of registration (options will vary depending on class). 
• Description of the proceeds to be claimed. If you want the registration to apply to all future proceeds, include the words "all present and after-acquired property" under the field "proceeds to be claimed". 
• An indication of whether the interest is to be a purchase money security interest (e.g. retention of title clauses, most leases and commercial consignments). 
• Giving of notice identifier (this is a number to help identify the new registration, such as a customer reference number). 
• Details of the grantor of the security interest, ensuring you have the correct entity details, particularly when dealing with trusts. 

The fee payable will depend on the duration of the security interest. 

Once the registration is complete, you will receive a verification notice via email or post. You must provide a copy of the statement to the grantor of the security interest as soon as reasonably practicable after the registration.