What is the PPSR?
Seven years ago the Australian Government introduced the Personal Properties Securities Register (PPSR), replacing REVS.
Some people may recall running a REVS check prior to purchasing a second-hand car to check whether money was owning on it from a previous owner.
Under the broader PPSR structure, all sorts of personal property is registered, including cars, boats, machinery, trailers and caravans.
The national online register serves to protect customers, but it also offers important protection to businesses that are:
For example, if a cane harvesting contractor leaves his harvester on a customer’s farm, and before he returns to collect it, the customer’s farm goes into liquidation and all assets are seized, the contractor must have his ownership of the harvester registered on the PPSR, otherwise liquidators will presume it belongs to the owner of the property.
In another example, if a machinery hire company leases an excavator to a civil works contractor and registers a financing statement on the PPSR, then if the civil works contractor goes bust, the machinery hire company will get their excavator back while other similar creditors who did not register their asset on the PPSR will have to line up with other unsecured creditors and hope to recover a small portion of what they were owed.
Anyone who has bought machinery, vehicles or other personal property on finance will have had those assets registered on the PPSR.
Why it’s time to review and renew
Seven years is the maximum, and most common, period of registration on the PPSR for goods with a serial number, such as machinery and cars.
As the PPSR will have been in existence for seven years on January 30, 2019, those registrations that were made shortly after the PPSR was launched will be due to expire.
Expired registrations cannot be renewed and if a registration expires, assets must be re-registered and will rank behind others registered before it.
Priority of registration on the PPSR is important because it determines the order in which creditors are paid or can recover goods if a default occurs.
An estimated 115,239 registrations will expire this month.
Businesses that registered seven-year security interests on the PPSR shortly after it came into existence will need to review those registrations to determine if they need to be renewed.
How you can protect your assets
Businesses can obtain a free report on when their registrations are due to expire through their online PPSR account.
This will help determine whether any registrations need to be extended, and to track and stay ahead of any future expiry dates.
Any registrations that are no longer needed can be left to lapse at no cost.
If you need help with reviewing and renewing your existing registrations or have questions regarding the PPSR, contact Dallas and his team at Bloom Accounting Services.
The team at Bloom can refer you to a solicitor to discuss further if necessary.