MAKE THE NEW PPSR SYSTEM WORK FOR YOUR BUSINESS

The new regime under the Personal Property Securities Act 2009 (Cth) (PPSA) is of much relevance to your business if you provide loans, lease equipment or supply goods on retention of title terms. However, simply registering your interest on the Personal Property Securities Register (PPSR) is only a starting point and without more, you may still be at risk of losing your claim on the property.

1.   PROVIDE DETAILED DESCRIPTIONS OF THE PROPERTY THAT IS SECURING YOUR LOAN

Vague or general descriptions of property in the PPSR may make it too difficult for administrators to identify what exactly is subject to your security interest.

In the administration of Hastie Group Limited, there were 995 registrations recorded on the PPSR. However, because the equipment being secured was so inadequately particularised, the administrators were unable to rely on the PPSR to identify what was being referred to.

 2.   IMPLEMENT PROCEDURES TO RECOGNIZE CORRESPONDENCE FROM ADMINISTRATORS

Further, in the administration of Hastie Group Limited, newspaper advertisements and approximately 3000 emails to creditors may have bridged the gap left by inadequate descriptions in the PPSR. However, approximately 80% of the secured creditors failed to respond, and the end result was that 77% of the total number of equipment remained unclaimed.

Accordingly, policies and procedures should be implemented in your business so that the appropriate contact details are notified in a PPSR registration and any notices received from administrators can be promptly addressed. Failure to do so may result in the sale of secured assets and a loss of the sale proceeds.