PPSR – Essentials and Registration Tips

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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