Amendments to the PPSA are imminent
Changes to the Personal Property Securities Act 2009 (PPSA) come into effect on 1 October 2015.
Essentially the amendments will require a less rigorous approach to short term leasing, thus alleviating business owners’ past confusion in attempts to effectively use the Act’s registry to protect their leased assets.
To effectively advise owners of businesses that lease goods about the importance of properly registering them on the Personal Property Security Register (PPSR), accountants and solicitors will need to be aware of the new amendments to the Act.
The above is particularly relevant to accountants and lawyers who should make clients fully aware of the adverse implications with respect to PPSA that would arise where insolvency intervenes and particularly, as is often the case, client goods are in third party hands.
Explaining the changes
As at the time of writing, the PPSA required leases of serial-numbered goods for terms greater than 90 days (or renewable for a term of 90 days or more), to be registered in the best interests of the owners. Otherwise, should lessees (people leasing the goods) be the subject of insolvency appointments, the owners could lose ownership of such goods not properly registered on the PPSR.
However, the PPSA will now be amended to lift registration requirements on a lease of goods with serial numbers - for example motor vehicles, caravans, boats, mowers and forklifts. These will not require registration where lease terms are less than 12 months, although the changes will only apply to leases entered into after 30 January 2012.
Registration is still required for serial-numbered goods for leases of longer than 12 months, or for any lease capable of renewal beyond a 12-month term.
The amendments will still afford protection for businesses that hire goods where it’s generally expected the hire will not exceed for 12 months.
For more information on, or questions about the PPSA contact Macks Advisory on 08 8231 3323 or visit our office at Level 11, 99 Gawler Place, Adelaide SA 5000.