In 2014, the Commonwealth Government introduced the Personal Property Securities Amendment (Deregulatory Measures) Bill 2014, to amend the Personal Property Securities Act 2009 so that leases of serial numbered goods of 90 days or more (but less than 12 months) are no longer considered a “PPS lease” that is required to be registered on the PPSR.
The PPSA previously defined a PPS lease (with exceptions) as a lease or bailment of goods:
(a) with a term greater than one year;
(b) with an indefinite term;
(c) with a term of up to one year, where it is renewable for terms totaling more than one year;
(d) with a term of up to one year, where the grantor retains authorized and uninterrupted (or substantially uninterrupted) possession of the goods for more than one year; and
(e) if the goods may or must be described by serial number, with a term of:
i. 90 days or more;
ii. less than 90 days where it is renewable for terms totaling more than 90 days; or
iii. up to 90 days where the grantor retains authorized and uninterrupted (or substantially uninterrupted) possession of the goods for more than 90 days.
Owners of serial numbered goods such as certain motor vehicles, aircraft, watercraft and intellectual property (including patents, designs and trade marks) who lease or bail their goods to customers for 90 days or more (or as described in paragraph (e) above) will no longer need to register their security interest to secure priority over their goods.
This amendment is in an effort to reduce the red tape for small to medium sized business owners; however, the Act will continue to apply to leases of serial numbered goods that were entered into before the amendment took effect on 1 October 2015.
If you have a lease that falls within any of the above definitions, you should consider registering a security interest as soon as possible (having given thought to any relevant exceptions).
We recommend you promptly seek advice from one of our Brisbane Commercial & Business Lawyers if you are uncertain whether the PPS Act applies to your goods.