PPSR anniversary coming up: Retain your security interests by renewing registrations

It is nearly seven years since the Personal Property Securities Register (PPSR) came into effect on 30 January 2012. The PPSR was set up to collect registrations from businesses and individuals of claims against assets held by customers, essentially as insurance against the customer becoming insolvent and not being able to pay you.

Why is this anniversary important?
The seven year anniversary is important because this is when the first lot of PPSR registrations will start to expire. The default and cheapest option for a PPSR registration covers seven years or less. For some items the maximum timeframe you can register for is seven years.

What do I need to do?
If you or your business have items secured on the PPSR:

What happens if I just let my registrations expire?
The registration will expire, become irrelevant, void, any other way you want to put it.

The real question is whether you will be affected by it. If your customer has met all their obligations and you just haven’t formally discharged the registration, then this won’t worry you.

However, the impact when the customer still has an obligation to you is that if the customer becomes insolvent, you may never have those obligations satisfied. This is because:

    1. Without a current PPSR registration you are no longer a secured creditor
    2. Even if you choose to register the item again, you are at the back of the queue. This is because you can only renew current items, there is no option to restore expired items. This means that you would have to submit a completely separate registration. Where before your old registration may have placed you ahead of other creditors, you may now find that there are other registrations with priority over yours.

It’s not worth letting PPSR registrations covering you against outstanding customer obligations lapse. They provide you priority among creditors in the event of something going wrong.

Not sure that the PPSR is for you?
Our article Protect your business: Ensure your PPSR registrations are enforceable explains why the PPSR provides invaluable financial risk protection for you in the event of a customer defaulting on their obligations.

If you have any questions about the PPSR or your registrations, call us 03 5339 3200 or contact us here.

Thanks for reading.

By Genna Kidd

The information contained on this website has been provided as general advice only.  The contents have been prepared without taking account of your personal objectives, financial situation or needs.  You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.

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