6 SEPTEMBER 2011
Under the new Personal Property Securities Act (PPSA) and regulations, there will be important changes affecting documentation, business processes and risk management for creditors, equipment lessors, consignors and other retention of title suppliers.
Applying to almost all forms of tangible and intangible property owned by any type of legal entity (including money, goods, motor vehicles, hire purchase agreements, accounts receivable, long term leases, investment securities and documents of title), the PPSA will regulate any interest or right in personal property which in substance secures payment or performance of an obligation.
This is so despite the form of the secured property or who has title to it and can include arrangements not routinely thought of as security interests such as a conditional sale agreements (sale subject to retention of title).
The PPSA will also apply to deemed security interests (for example, a lessor or bailor of goods under a “PPS lease”; a consignor under a commercial consignment; and
a transferee of accounts receivable or equipment leases, hire-purchase agreements and chattel mortgages), regardless of whether the interest secures the payment of money or the performance of an obligation.
A number of existing registers, including the ASIC Register of Charges and the Register of Encumbered Vehicles will be replaced by the PPSA as it moves to a single regime based on the substance of the transaction.
Holders of security interests must ensure that their documentation and processes are ready and potentially affected assets are identified, so that rights are recorded and protected within the required time frames once the legislation takes effect.
You are a valued Kinneally Miley contact, for more information related to this Legal Update please contact us.
[contactsbox] [leftcolumn]Contact Partner: Tracey Miley
Direct Telephone : 07 3210 5780
Mobile Telephone : 0438 776 161
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