Fishing industry: What you should know about the Personal Property Securities Register (PPSR)
Third party interest in Statutory Fishing Rights (SFRs) which were previously registered with the Australian Fisheries Management Authority (AFMA) were transferred to the PPSR in January 2012.
The AFMA no longer registers third party interests in SFRs.
Under the Personal Property Securities Act 2009 (Cth) (PPSA), a third party security interest in SFRs is known as a security interest in personal property.
Instead of notifying the AFMA of third party interest in a SFR, you now register the security interest in personal property on the PPSR.
What is personal property?
Personal property is property other than land or buildings. It includes physical goods such as watercraft, trailers, machinery, trucks, household items and furniture, electrical goods, jewellery, cars, crops, as well as intangible property (for example, SFRs and rights under a contract).
WHAT IS A SECURITY INTEREST?
Generally, a secured creditor takes a security interest to enforce its rights against particular items of collateral in case the debtor defaults on the obligation. If the debtor is declared bankrupt, a secured creditor takes precedence over an unsecured creditor in the distribution of the property of the debtor who is declared bankrupt.
Under the Personal Property Securities (PPS) Act, a creditor would be considered to be a secured creditor if they had met certain requirements, which will generally include registering their security interest on the PPSR.
WHAT DOES PPS REFORM MEAN FOR ME?
The PPSR is the authoritative record of registered security interests in all types of personal property.
Registering an interest in personal property is a key way to ensure priority of the interest. Priority, as used in the PPS Act, refers to the order of precedence for determining which creditor has the right to be paid first in the case of the default or bankruptcy of the debtor.
RETENTION OF TITLE
Sometimes property is sold or leased on the basis that the purchaser takes the property but legal ownership, or title to the property, remains with the seller until the financial arrangement is concluded.
Under the PPS Act these types of arrangements create a security interest in the property sold or leased. As a result, a seller’s (or lessor’s) rights in the property may be at risk if the security interest is not registered on the PPSR. Terms of supply agreements and leases may need to be reviewed by business owners or their business advisors to determine whether they are in accord with the PPS Act.
BUYING PERSONAL PROPERTY
Importantly, the PPS Act provides in certain circumstances that a buyer of property will take it free of any security interest; that is, it is unencumbered. For example, where the property is purchased for personal, domestic or household purposes and its market value is $5000 or less.
In regard to motor vehicles and watercraft which must be registered by serial number, a failure to register by the relevant serial number may result in a purchaser taking the property free of any security interests in that property. In this instance the PPSR will operate in a similar way to state and territory based vehicle security interest registers, such as REVS.
HOW WILL THE PPSR AFFECT ME?
In addition to the Commonwealth Fishing Register, the PPSR replaced the Commonwealth Shipping Register, the ASIC Register of Company Charges and most state and territory registers of security interests in personal property, including registers of interests in motor vehicles, such as the VSR in Victoria or REVS in NSW.
The PPSR should be searched to find out about existing security interests to ensure that if buying or selling personal property such as a SFR or watercraft that there is clear title.
SEARCHING THE PPS REGISTER
You can access the PPSR via the Internet at www.ppsr.gov.au or by calling the contact centre on 1300007777 during business hours.
For SFRs you will need to search by grantor details.
WHAT IS A GRANTOR?
A grantor is an individual or organisation who grants a security interest over personal property to a secured party. This includes using your personal property as security for a loan, such as a secured car loan. If you lease equipment or acquire supplies on retention of title basis, this may affect you.
WHAT WILL IT COST?
All searches are subject to a fee of $4.00. Each search of the PPSR which shows no security interest will provide protection under the PPS Act. You can print a search certificate for each search result at no additional cost.
PPS REGISTER CREDIT ACCOUNT
If you wish to apply for a credit account to use the PPSR, the form is available on the PPS website. While you can also pre-pay or pay as you go, if you are a regular user, you may find it useful to establish a credit account.
PROFESSIONAL ADVICE RECOMMENDED
PPS could affect you or your business in a number of different ways. You should seek professional advice in relation to your specific circumstances.
where can i get further information?
For more information visit the ‘Ask the Registrar’ page at www.ppsr.gov.au.
contact us
Visit online www.ppsr.gov.au (to search or register)
Telephone 130000PPSR (1300 007 777)
HELP IN OTHER LANGUAGES
If you have difficulty speaking or understanding English, contact the Translating and Interpreting Service (TIS) on 13 14 50 for the cost of a local call. The TIS is available 24 hours a day, seven days a week for more than 170 languages.