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PERSONAL PROPERTY SECURITY

GENERAL & COMMERCIAL LAWYERS | SYDNEY | NORWEST BUSINESS PARK| BAULKHAM HILLS

Legal Notice

In order to protect your personal security interest, you must registrar your interest on the national PPSA system in accordance with the Personal Property Securities Act (“PPSA”). What Is PPS? For example: A Debtor, Lessee, or Guarantor grant a security interest to secure the performance of an obligation or payment to a secured party – a Supplier, Manufacturer, Lender, Creditor, or Lessor. The secured is attached to the personal property and known as the collateral. However, once attached, the interest created must be preferred in the following ways: • Control • Possession • Registered on the PPS Registrar • Temporary Perfection Perfection is only achieved once one of these steps has occurred. Competing securities are there determined by the priority rules – the first in time rule, that is, the first security perfected will have the highest security. Hence, the quicker you register your interest the better. It excludes Real Estate and Water Rights. PPSA is very wide and may apply your business if: • You supply goods on credit and desire retention of title term • Have charging clauses pursuant to an instrument/document • Provide Finance or Credit secured by personal property • Chattel Applications • Loan Applications • Licence intellectual property The security is either tangible (physical objects) or intangible (which is not a financial property, goods, or an intermediated). Intangible includes intellectual Property as defined by section 10 of the PPSA. Is A Written Agreement Essential? There is some confusion whether or not the Security Agreement has to be in writing. We would highly recommend that you have a written agreement dealing with your security interest. Also, keep a safe copy of all records dealing with the transaction and ensure that the agreement is signed in the manner prescribed by the wording of the PPSA under section 20(3). 

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