The Personal Property Securities Act 2009 (Act) has been amended to make leasing simpler and cheaper.
Old definition – PPS Lease
Until recently, if you leased or bailed goods for:
- a term of more than 1 year (including options and extension); or
- an indefinite term,
the lease can be deemed a ‘PPS Lease’.
Importance of PPS registrations
To protect your interest in the goods being leased, you must register your security interest on the Personal Property Securities Register (PPSR) in the required time frame.
If you fail to register within the required time frame, and the lessee gets into financial difficulty, you can lose your property.
New definition – PPS Lease
The change to the law (which applies from 20 May 2017):
- extends the minimum term for a PPS Lease to more than 2 years; and
- provides that a lease for an indefinite term will not be a deemed PPS Lease (unless and until it runs for more than 2 years).
These changes mean that businesses which regularly lease goods for 2 years or less will no longer have to register their interests on the PPSR to protect their goods.
- sell goods on a retention of title (ROT) basis; or
- lease or bail goods to another person,
you should have appropriately prepared agreements in place and where required, register your security interest on the PPSR.
Murdoch Lawyers business law team assist business owners with all personal property securities (PPS) and personal property securities register (PPSR) needs. If you would like more information please contact Director, Matt Bell.
This publication has been carefully prepared, but it has been written in general terms and should be viewed as broad guidance only. It does not purport to be comprehensive or to render advice. No one should rely on the information contained in this publication without first obtaining professional advice relevant to their own specific situation.