The Attorney-General has confirmed the registration commencement date for the PPSA is Monday 30 January 2012. Businesses should be prepared for the PPSA by now. Further information about the transition to the PPSA is available at www.ppsr.gov.au or please contact us for advice.

The PPSA will change the way businesses and individuals deal with personal property (ie essentially all property except land). The PPSA will introduce a new national system for registering security interests, and also changes what is considered a "registrable" security interest. If you own, lease, buy or sell personal property, then you need to be aware that the game is changing soon.

Migrated security interests

A transitional security interest (TSI) is created by a security agreement which is currently in force and that will continue to be in force after the commencement date. The PPSA only applies to TSIs from the commencement date.

TSIs that are currently registered on a transitional register will, subject to certain requirements, become a migrated security interest. To be migrated, the security interest must be:

  1. a TSI
  2. registered on a transitional register that was effective immediately before the time the data was migrated to PPSR
  3. accepted by the PPSR Registrar (Registrar).

In addition, the registration in the transitional register must have been duly authorised by the law under which the register was maintained.

Migration period issues

Some questions that may arise are:

  • what do you do if your migrated TSI needs to be amended during the migration period?
  • how should you deal with a partial release of a migrated TSI?
  • should all current registrations, including provisional charge registrations, be lodged with the current register, or should you simply wait until the commencement date to put a financing statement in place on PPSR?

What approach should businesses take to obtain the highest priority, or best security, as a secured party during the migration period?

The most prudent approach is to register all new securities, amendments and releases now, on all current registers, including ASIC, and not delay any action until the commencement date. You should then check the PPSR on or shortly after the commencement date to ensure registrations effected during the migration period have indeed been migrated. Any error or non-migration can be fixed at that time by lodging a financing statement.

Next steps

If you want to ensure your relevant interests in any personal property are secured and you haven't yet reviewed your current business arrangements, you are running out of time.

If you are not sure how the PPSA will affect your business, please contact one of our team to discuss and we can provide you with practical solutions to deal with any personal properties securities (PPS) issues you may encounter.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.