On 30 January 2019, security interests which were originally registered on the Personal Property Securities Register (PPSR) upon the commencement of the Personal Property Securities Act 2009 (Cth) for a period of 7 years will expire.
When the PPSR commenced operation on 30 January 2012, many secured parties registered 7 year security interests. If those security interests are not renewed before the 7 year term expires, those security interests will lapse and the secured party will become an unsecured creditor, ranking behind other secured creditors who have renewed their registrations.
A security interest in personal property the subject of the lapsed registration may vest in the entity who granted the security interest (the Grantor), rather than the secured party, if the Grantor becomes insolvent. If this occurs, the secured party will not be able to enforce its security interest.
Registrations with 7 year terms may include those:
- in respect of goods with a serial number, such as motor vehicles; and
- over intangible property, such as patents and trademarks.
A registration can only be renewed on the PPSR before its expiry date. Once the registration has expired, it cannot be renewed.
Each secured party should, as soon as possible:
- determine whether it has any registrations due to expire in respect of 'active' security interests; and if so
- take immediate steps to renew those registrations.
Please contact us on (02) 9325 5777 if you have any questions or require advice on renewing your PPSR registrations.