PPSR – Essentials and Registration Tips

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.

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