This was a webinar presentation presented by Kathleen Watt on 15 September 2016.
The slides for this presentation are as follows:
PPSR Essentials and Registration Tips
Key terms explained
- Secured Party, Grantor, Security Interest, Collateral, Perfection, AllPAAP, Secured Party Group, Financing Statement
Registration tips –
- Written Security Agreement
- Secured party group
- Financing Statement before Collateral delivered
(or at least within strict time limits) - Amending the Financing Statement
- Providing the Security Agreement on request
PPSR Essentials
- Secured Party
- Grantor
- Collateral
PPSR Essentials – Collateral
Classes of registration
Tangible property
- Cars, aircraft, watercraft, crops, livestock, other
General property
- All PAAP, All PAAP except…
Intangible property
- Accounts, intellectual property (TM, ©, etc)
Financial property
- Currency, chattel paper, bundle of lease agreements
PPSR Essentials – Security Interest
Section 12 Personal Property Securities Act 2009:
An interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation.
PPSR Essentials – What am I securing?
Payments
- Loan repayments
- Lease or hire payment for goods
Purchase money
- Hire purchase agreements
- Ongoing supply of goods on ROT basis
- Vendor finance repayments
Obligations
- Maintaining leased property in good repair
- Under a Business Sale Contract or Real Property Lease which includes chattels
PPSR Essentials
- Perfection
- All PAAP
- Secured Party Group
- Financing Statement
PPSR Registration Tips
- Written Security Agreement
- Secured party group
- Financing Statement before Collateral delivered (or at least within strict time limits)
- Amending the Financing Statement
- Providing the Security Agreement on request
PPSR Registration Tips – Written Security Agreement
- Can be oral or in writing, but needs to be in writing to be enforceable against 3rd parties
- One Security Agreement can support multiple registrations.
- No specific formal requirements, but…
- Best practice to include rights if there is a default – e.g. to retake possession of collateral and sell up
- Must cover the security interest and should describe the collateral
PPSR Registration Tips – Secured Party Group
- To help secured parties manage security interests
- Created online prior to registration of your security interest
- A SPG can consist of one or more individuals and/or organisations
- After being set up, entities in a SPG cannot be changed
- Secured party details: Name, Identifier, Addresses for service
- For trusts, SPG registrations should be made against the ABN of the trust, not the ACN or ARBN of the trustee
- Each SPG will be provided with:
- SPG number to identify the Secured Party in its registrations
- Access code for later access to all registrations of the SPG
PPSR Registration Tips – Financing Statement before Collateral Delivered (or at least within strict time limits)
- No more transitional protection – expired 20 Jan 2014
- Priority is generally given to the party with the earliest registration commencement time
- Can register before signing a security agreement
- Take care with Company Grantors – section 588FL of the Corporations Act 2001 (Cth)
PPSR Registration Tips – Financing Statement before Collateral Delivered (or at least within strict time limits)
Purchase Money Security Interest (“PMSI”)
A PMSI has priority over other perfected security interests if:
- PMSI is perfected by registration;
- Registration states that the interest is a PMSI; and
- PMSI is registered by the required time.
| Collateral | Tangible | Intangible |
| Inventory | Before possession | Before attachment or creation |
| Not inventory | Within 15 business days | Within 15 business days of attachment or creation |
PPSR Registration Tips – Amending the Financing Statement
- A Financing change statement amends a Financing statement
- Some aspects of a Financing statement can be amended, some cannot. If not, a new registration must be made, but an “Earlier registration number” may be entered. This may afford the earlier registration time
- Registrations can be discharged once payments and/or obligations have been met – end time is registered and registration stops taking effect
- Some registrations must be discharged within 5 business days of “unperfection”
- In other circumstances, consider – should there be a positive obligation of release?
PPSR Registration Tips – Providing the Security Agreement on Request
- Interested person(s) can request from a Secured Party:
- Copy of Security Agreement providing Security Interest
- Written statement disclosing secured amount or obligations and terms of payment or performance
- Written approval or correction of the same
- Written approval or correction of a list of affected property
- A Secured Party must respond before the end of 10 business days after the day the request is received, unless the response is exempted or time is extended by Court order
- Exceptions apply – but consider extracting unrelated commercially-sensitive terms
