This paper was co-authored by Kellie Cook, Senior Associate
If you were granted a security interest before the Personal Property Securities Act 2009 came into effect on 30 January 2012, to receive the protection of the Act if you were unable to register that interest before the introduction of the Act, you need to ensure that your interest is correctly registered on the Personal Property Securities Register (PPSR) before the transitional period expires on 30 January 2014.
The transitional period allows for security interests created before 30 January 2012 to be temporarily perfected, meaning that any existing security interest that is not registered on the PPSR retains the same priority it had at 30 January 2012 against other security interests in the same property that were created and registered after 30 January 2012.
There are certain transitional security interests that should have migrated to the PPSR automatically, for example company charges that were previously registered with ASIC. However, these security interests should also be checked to ensure that they have correctly migrated to the PPSR. If you have a migrated transitional security interest that is not correctly registered on the PPSR before 30 January 2014, you will not be properly protected.
What does this mean for you?
If you have a transitional security interest that is not registered by 30 January 2014, you risk of losing your priority against other creditors even if your interest was granted before theirs, or your security interest transferring to the person/party that granted you the security interest if that person/party becomes insolvent.
The Act covers a broad range of interests, and to make sure that you will not be adversely affected by the expiry of the transitional period on 30 January 2014, you should review any such agreements that were entered before 30 January 2012.
If you are unsure, or if you have any questions relating to the Personal Property Securities Act 2009 please contact Emma Leys on (08) 9321 3755.
The information published on this website is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.