6 June 2018

The seven-year anniversary of the Personal Property Securities Register (PPSR) is approaching, which means all businesses that made seven-year registrations (the most common registration period) will find their registrations expiring from 30 January 2019.

And while January 2019 might sound like a long way off, the reality for those with impending PPS registration expiries is very different.

As mentioned by the speakers at our recent Equifax PPSR Forums, the PPSR is a complex beast, and one of the things many businesses don’t realise is that it’s a ‘to the second’ registration. If businesses leave their registration renewals to the last minute, they run the risk of their registrations lapsing and losing all the protection they have over their ‘personal property’.

Unfortunately for businesses, a PPS registration cannot be renewed after it lapses.

This can mean the claim to the property as registered on the PPSR is unsecured and leaves all property that was registered before expiration up for grabs. The business that has let their registration expire goes to the bottom of the list of claimants to that property.

Even if a business quickly re-registers after letting a previous registration expire, the security on their property can be ineffective if the debtor becomes insolvent within six months of the new registration being lodged.

The importance of ensuring your registrations are correct cannot be overstated. There is no benefit to renewing an invalid PPS registration. In light of this, businesses should use the renewal process as the time to correct their registrations. Even if everything was correct at the time of registration, factors such as your customer details, or the way you described your goods, may have changed in the interim, which means the registration needs updating.

The other challenge that many businesses will face is ongoing renewals. While we’re currently approaching the first big push for renewals, the process will soon be ongoing as registrations that were created after the launch of the PPSR come up for renewal. It’s important that businesses work renewals into their budget considerations and processes, or they risk letting registrations slip through the cracks.

When it comes to the PPSR, timing is everything. Unfortunately, most businesses are likely to leave their renewals to the last minute, and there’s always more to do than they realise. But the PPSR doesn’t have to be the cause of stress – in fact, with the right guidance, it can be a powerful tool for protecting your interests.

To learn more about the PPS Act and how to register, visit www.ppsr.gov.au, or to contact an Equifax PPSR Specialist, please email us.

 

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.