The Personal Properties Securities Act 2009 (Cth) commenced on 30 January 2012. From that date, businesses and consumers started to register security interests on the Personal Properties Securities Register (PPSR) established under the Act. Registrations in respect of certain types of property are limited to a maximum of 7 years in duration. The PPSR turns 7 on 30 January 2019 which means that security interests registered for a period of 7 years start to expire from that date, unless renewed.
Why is this important?
You can only renew or amend a current registration on the PPSR. If the registration has expired it cannot be extended.
If a registration expires, a new registration of your security interest must be made to provide security in the goods in question. The problem with that approach is that you may lose your priority position in which case you will rank behind other registered security interests in the event of default. This means that other creditors may be paid out before you or may be able to recover goods before you. If the grantor becomes insolvent while you are unregistered, you will lose your security interest.
You will retain your original registration date and priority if you renew the registration of your security interest before the expiry date.
Does this apply to your business?
Registrations against goods with a serial number, such as a motor vehicle or a patent, can be registered for a maximum period of 7 years only.
If you made registrations in 2012 against that type of property, or other types of property with a registration period of 7 years, you should review when those registrations expire.
What you should be doing
If you have security interests registered on the PPSR, you should:
- Keep track of and monitor the expiry date of your registrations. It is easy to do this by logging in to your PPSR account and obtaining a free “registrations due to expire” report. This report provides you with a list of registrations that are due to expire in a specified time period (e.g. next month). Put in place a process for doing this.
- See if the registration of a security interest requires an extension or if it is due for discharge. At the same time, see if any of the details in your registration need updating.
- Renew the registration of security interests that need an extension before the expiry date. The fees to extend a registration start at $6.
For more information visit https://www.ppsr.gov.au/registrations-due-expire-report
For assistance with renewals, please contact us at McGuinnLegal.