Many changes have been made to the Personal Property Securities (PPS) Act and its register since 30 January 2012.
Recently, almost 1 million registrations were identified by the PPS registrar as due to automatically expire between 1 July 2018 and 31 December 2019 – more than 130,000 of these expire during January 2019 alone. You will not be notified before this occurs. Unless you take suitable steps, you will lose your rights in the assets, and the discharged registration cannot be retrospectively fixed. It will be too late to play catch up if you do not plan and take action immediately.
Diverting key personnel to review contracts and each and every registration may not be feasible. As one option, we can undertake these steps. Our PPS expert Peter Mills can help you plan and execute the “3 x R’s” in a suitable and cost efficient manner to suit your budget. This is especially important, given that many of your key personnel might be on holidays in December 2018 and January 2019
Step 1: Review customer contracts due to changes to the PPSA – have reviewed now
If new contract terms have been sent to customers since you registered against them, you might:
- no longer have security or priority over your goods or “proceeds” of goods
- have lost valuable enforcement rights under the PPS, and
- be exposed to unfair preferences, offences, and uncapped compensation claims
Your contract documentation should be reviewed before undertaking the next step.
Step 2: Rectify incorrect data – have registration data reviewed now
Now is also an excellent opportunity to review all of your PPS registrations and rectify any incorrect data. Importantly, the PPS register does not automatically update data which has since become incorrect, and left you unprotected. Some examples of this are:
- lodging security interests as “transitional” security interests, when they were not transitional, or ceased being transitional due to unsuitable contract documents
- a customer has changed their name on their driver’s license due to marriage or divorce
Most, but not all, incorrect data can be rectified. Completely new registrations might be needed in some cases to properly protect you.
Step 3: Renew – end dates – plan and execute now
Most registrations expire on a specific end date. Most end dates are exactly 7 years after you lodged the registration. Some end dates however might be sooner or later. The register’s software automatically discharges a registration on its end date unless it is renewed before then. The discharged registration cannot be retrospectively fixed, and you will have likely lost your rights in the asset.
Subject to the outcomes under the other steps, a suitable option for your business might be to introduce and send out suitable contract terms, and relodge all of your registrations with correct data and new end dates in a bulk data lodgement.
Author: Peter Mills (former Special Counsel)