If you are a business that buys, sells, leases or hires goods like construction machinery or motor vehicles, then you may need to act on an important anniversary this year.
The Personal Property Securities Register (PPSR), a national online notice board where individuals and businesses can record their security interests in personal property, turned seven years old in January this year.
While some goods can be registered indefinitely, a lot of assets are registered for seven years.
For many, this means their registrations are due to expire soon.
Registrations can only be renewed while they are active, meaning you will lose the security to an asset until you have completed the registration all over again.
How PPSR impacts construction
The PPSR can protect businesses, particularly in the real estate construction sector, if a customer can’t pay, or a contractor goes into liquidation.
Businesses that lend out building machinery, equipment or motor vehicles on financing agreements, hire purchases or operating leases for more than two years can secure their rights to the property through a PPSR registration, on top of a standard contract.
Otherwise you might risk your entitlement if the lessee goes into liquidation with the equipment still in their possession.
Using a motor vehicle’s serial number or Vehicle Identification Number (VIN) to register it will protect you as an owner.
A PPSR is also still valid if equipment has been sublet or sold without your permission, where you may be able to reclaim the property.
However, there are certain purchaser protections that may rule out your claim to repossess an asset.
Developers can also protect themselves in the case of a contractor becoming insolvent during the construction of a project.
What to do
The easiest way to stay on top of your registration is to find out when it is due to expire and then renew it ahead of time.
This can prove difficult since owners aren’t notified that their registrations are due to expire.
If it’s not renewed in time, you may also risk foregoing your existing priority to creditors with earlier registrations.
You can find out when it needs to be renewed by applying for a Registrations due to expire report from the Australian government-run PPSR website.
If you need help ensuring your assets are protected or would like to learn more about our services, give us a call on (03) 9875 2900 or fill out the contact form below and we’ll be in touch.
