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On 30 January 2012, the new Commonwealth Government scheme for security interests came into effect, and the new Personal Property Securities Register (PPSR) began operations. The PPSR will have significant impacts on the conduct of business, of which you need to be aware.

What is Personal Property?

Personal property refers to any property that is not land or things affixed to land, which includes: fixed charges, floating charges, conditional sale agreements, chattel mortgages, motor vehicles, boats, machinery and equipment, crops, shares, intellectual property and contract rights.

If you have any debt, money or interest accrued over any of these items, you are affected by the new PPSR.

Why is the PPSR relevant?

The PPSR will have a major impact on how security over personal property operates and in determining who takes priority in competing interests over the same property.

Arrangements not traditionally thought of as security interests such as consignments, hire purchase agreements, leases of goods and conditional sale agreements (including an agreement to sell subject to retention of title) will now be security interest arrangements that will need to be registered.

The introduction of the register will mean for those purchasing personal property, a simple check of the register will tell if someone else has a competing interests in that property.

Examples of common transactions affected by the PPSR

  • When buying any asset over $5,000 (e.g.: a company vehicle, plant & equipment or intellectual property) you should conduct a search of the register to determine whether you are buying that property free from any security interest. The PPSR search may reveal that the seller does not actually have clear ownership of that item because it is used as security for a loan.
  • If you supply goods on credit and you wish to retain ownership of the goods until the buyer has paid your account in full, you should register this interest on the PPSR to ensure you have the greatest protection available to you in the event the buyer goes into liquidation or sells the good and refuses to pay. This is likely to affect a number of businesses and you should ensure you act to protect yourself.
  • If you provide any goods on consignment, you should register these on the PPSR.
  • If you have leased real estate to a tenant, you should consider whether any items other than fixtures (e.g.: factory equipment, fridges, furniture or other goods not fixed to the premises) exist and consider registering these interests on the PPSR. If a security interest is not registered, the goods may be sold or the goods may form part of the pool of assets in the event of a bankruptcy or liquidation. This will also have an impact on the purchase and sale of real estate and you will need to look at any personal property that is being sold with the real estate.

What should you do?

In light of the changes, you will need to look at the changes that may need to be made to your transactions, procedures and terms and conditions to make sure you do not suffer any adverse effects from the changes. You should also check with your accountant as to any other security interests your business may have.


It is clear that these changes will have some effect on your business practices and procedures. The consequences of not changing your practices could, for example, mean that your interest has a lower level of priority if a priorities dispute arose in the event of the insolvency or liquidation of a company that you lent to.

Thank you for your feedback.

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