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Personal Property Security: It’s In The Ts & Cs


The Personal Property Securities Act 2009 (PPSA) was quite the landmark move for Australian business, providing a single national law that replaced separate Commonwealth, State and Territory laws, leading to the establishment of the Personal Properties Securities Register (PPSR).

Australian businesses suddenly had one place they could register personal property as a way to secure lending, assets sold could be registered to ensure debt could be recovered if unpaid, and businesses could check if the second-hand goods they were about buy were debt free. The potential benefits are indeed obvious, but, as with anything relating to assets and property, the devil can be in the details.

As the owner of credit reporting agency CreditorWatch, I have seen first-hand the dangers that a lack of understanding in the PPSR can bring businesses. Smaller businesses are often caught out, their limited knowledge in the PPSA resulting in the seizing of assets and, in more cases than you can imagine, liquidation. Even Australia’s larger companies, the ones with the basic know-how, still don’t have the necessary processes in place to ensure there are no nasty surprises down the track.

This is admittedly not my area of expertise, but when you don’t know – ask. I asked a colleague of mine, John Fairgray – Partner at BBW Lawyers, to share some words of wisdom.

“Outdated terms and conditions, and agreements in general, keep popping up as a serious concern for businesses. We’ve seen four or five come across our desks just recently,” John says.

“Businesses shoot us questions on PPSR and they don’t even have the right provisions to deal with anything relating to that. I know that sounds pretty simple, but it should be the first starting point. It’s important to really check those terms and conditions addressing PPSR.”

John strongly suggests having Ts and Cs looked at regularly, at least once every year or two years. Too many Ts and Cs are being locked in without making reference to the business’ powers or rights relating to the PPSA.

And it’s not just the Ts and Cs going overlooked.

“When you go to register, make sure you actually know how to properly register,” John says.

“It’s important to understand how to identify assets correctly; otherwise it’s an invalid registration. If it isn’t valid it will fall off the register, and if the company falls into liquidation the liquidator can swoop in and take the assets.”

Of course, most unforeseen issues come down to companies going about business uninformed. To repeat an earlier statement, when you don’t know – ask.

“Businesses underestimate the power of talking to people that know about the details. Whether it’s a lawyer or an expert in this sector, it’s worth talking to someone about how it all works and to look at what you should be doing in practical terms.”


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