The 30th of January 2019 marks the seven year anniversary of the much loved Personal Property Securities Register (“PPSR”).
Before you pop the bottle of champagne, let’s just pause to consider the significance and implications of reaching the seven year itch.
The seven year security interest is the most commonly selected registration period (because it is the cheapest in terms of fees) and is the longest registration term for ‘serial numbered goods’ (like motor vehicles).
So from 31 January 2019, a lot (about 115,000) of registrations will automatically be discharged.
Expired registrations cannot be renewed, which means a new registration will be required and this creates issues regarding priority over other existing security interests.
There is also the risk that, if the grantor (i.e. the borrower or lessee of goods) becomes bankrupt or enters into external administration, the security holder will lose their goods altogether (and this can be disastrous).
So what should you do with your clients?
Accountants and lawyers who have clients with PPSR exposure should discuss the implications of the seven year expiry of registrations at their next client meeting.
Clients should review and keep an eye on their registration expiry dates. The PPSR website has a useful page dedicated to the review and renewal of PPSR registrations. You can visit the PPSR webpage here.
And, it goes without saying, renew PPSR registrations before they expire.
About the author
Greg Quin is a Director at HLB Mann Judd Insolvency WA and has been with the team for nearly 10 years. Greg oversees the daily operations of the many insolvency appointments managed by the team and looks after the operations of the practice.
If you have any queries about the Personal Property Securities Register, or any other insolvency matters, please feel free to contact Greg on 08 9215 7900, 0402 943 091 or via email to gquin@hlbinsol.com.au.
