2012 marked the commencement of a complete overhaul of the way that security interests (other than real property mortgages) are dealt with under Australian law.
In February 2012, the Personal Property Securities Act 2009 (Cth) (PPSA) and the Personal Property Securities (Consequential Amendments) Act 2009 (Cth), came into effect, and introduced, among other things:
- a single, national register – namely, the Personal
Property Securities Register (PPSR)
– on which security interests need to be registered, in order to have priority over nonregistered or subsequently registered security interests; - a wider range of interests – including those not traditionally regarded as security interests – that constitute "security interests" under the PPSA.
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The types of security interests regulated by the PPSA include fixed and floating charges3, chattel mortgages, finance leases, margin loans, commercial consignments (including retention of title arrangements) and the factoring of book debts. Interests in land continue to be regulated by state based legislation and land titles registers; and
- a set of priority and enforcement provisions in relation to security interests.
Due to the broad definition of "security interest" in the PPSA, businesses may need to register contractual and other rights that they have in personal property in order to ensure the enforceability of those rights as against the rights of third parties. As a result, the PPSA regime can affect all businesses to some degree.
Footnotes
3 Now known as charges over circulating and non-circulating assets.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.