Is your security still perfected?

Articles Written by Craig Wappett (Partner), Nicholas Edwards (Senior Associate), Jack Weinert

The Personal Property Securities Register (PPSR) commenced operation on 30 January 2012. All seven-year registrations made on the:

  1. old state-based motor vehicle registers, immediately before the PPSR commenced; or
  2. PPSR immediately after it commenced,

will begin to expire shortly and this will have adverse consequences for secured parties who do not act to renew.

Be aware that all specific collateral registrations on the PPSR against serial numbered property such as motor vehicles, watercraft, aircraft and certain types of intellectual property are likely to be seven-year registrations, given that is the maximum registration period.

Consequences

An expired security interest on the PPSR (subject to a few exceptions), cannot be renewed or extended and the only option available to a secured party is to submit a new registration. This means there will be no “continuity of perfection” and priority of that security interest will be lost. This clearly has serious ramifications in the event of debtor insolvency.

Another consequence is that the new registration will be ineffective for a period of six months under s 588 of the Corporations Act 2001 (Cth). This is because the new registration will have been made more than 20 business days after the creation of the security agreement.

How to check the expiry date of a PPSR registration

As good practice we recommend visiting this page < https://www.ppsr.gov.au/registrations-due-expire-report> on the PPSR website and running the “Registrations Due to Expire Report”. The report will list each registration together with an expiry date. If any of your registrations have an upcoming expiry date, it is important that you take immediate action to renew them immediately.

How to renew

  1. Log in to the PPSR using your Secured Party registration number and token (password).
  2. Make any necessary updates to the registration before it is renewed. For example, if the party details have changed or new contracts have been executed, these details should be updated.
  3. Renew your registration and record the new expiry date.
  4. Update company procedures to include a mechanism whereby PPSR registrations with upcoming expiry dates are flagged to the responsible employee for renewal.

If you have any concerns or queries about a registration on the PPSR with an upcoming expire date or any other related issues, please contact a member of our insolvency and restructuring team.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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