Australia: Business Solutions – Personal Properties Securities (PPS)
Regulation and Compliance Update

Gadens Lawyers are providing a solution for your customers who are impacted by the new Personal Properties Securities Act.

Many Australian businesses – including many of your customers – will be significantly affected by the PPS changes to the law of ownership impacting all kinds of property, except real estate (and a few other exceptions).

Example

Your customer supplies building equipment. Under its business terms, title does not pass until payment. Under existing law, the builder could not sell those goods and give a good title to the purchaser. If a liquidator is appointed to the builder, the builder cannot sell the goods. After the PPS Act commences, the opposite will be the case unless your customer as unpaid vendor has notified its interest on the PPS register.

Although financiers are most impacted by this new law, there is significant impact on many other businesses. Gadens Lawyers provides four solutions for these businesses:

• face-to-face and written training
• an outsourced service to document and notify PPS interests
• provision of documents and procedures to document and register PPS interests in-house
• review of business practices to identify transitional issues.

You may care to pass this update on to affected clients and invite them to contact us. We have provided a short summary of the PPS below for their use

More information about PPS

PPS legislation replaces over 70 pieces of legislation and over 35 registries. It provides uniform Australian law and therefore is expected to provide significant business efficiencies. The PPS regime completely replaces the existing scheme for taking security over everything except real estate and a few other exceptions.

PPS establishes a register for recording interest in virtually all forms of property including:

• goods (eg cars, ships, planes, mining equipment, farm machinery etc);
• growing crops;
• IP;
• contractual and other rights;
• debts;
• shares, units, debt securities;
• mining tenements.

The register will be electronic and will not involve the lodgement of a copy of a security agreement, but rather the registration of a financing statement.

In addition to what has always been considered as a registrable charge or mortgage, interests needing to be registered include:

• leases of goods (not real estate);
• hire purchase agreements;
• retention of title arrangements.

For more information, please contact: