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Finlease - Personal Property Securities Register

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Personal Properties & Security Register (PPSR) September 2012
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Personal Properties & Security Register (PPSR)September 2012

PPSA – What is it all about ?

What is a PPS Lease ?

Working Examples

Master Agreements

PPSA Checklist

PPSA – How to Register Security Interest

Agenda

Comprehensive new Commonwealth law regulating security interests in

personal property. The new law commenced on 30/1/12 and replaces 70+ Acts.

“Personal property” covers basically everything except land and certain statutory

licences.

Clear objective of PPSA is to encourage owners of hired equipment to

make their interest public by registration on the new PPS Register.

If choose not to, then face the possible loss of their equipment.

New reality - ownership of equipment is by itself no guarantee

that they will be able to recover it in an insolvency of the customer.

PPSA – What is it all about?

A lease or bailment of goods:

For a term of more than 90 days (if serial numbered goods); OR

For an indefinite term even if either party can terminate in less

than a year.

“Serial Number” goods are:

– motor vehicles (inc vehicles that travel > 10 km/hour OR have total motor

power of more than 200W. Trailers and attachments can also be caught).

– watercraft,

– aircraft and aircraft engines.

What is a PPS lease?

A hire for an indefinite period is a PPS lease from inception.

Here is an example of a PPS lease:

– HireCo hires a crane to CompanyA. The hire agreement

describes the term as „TBA‟ and is therefore for an indefinite

term. This is a PPS lease. The same conclusion applies if

the hire is for a fixed term of more than 90 days.

Working Example

Hires that exceed the time threshold become PPS leases even if

they weren’t to begin with.Even if the hire has a fixed term shorter than the applicable PPSA time threshold, it can

turn into a PPS lease when the time threshold is exceeded. It is the actual period of the

hire that matters.

HireCo hires a crane to CompanyA under an agreement that states

the hire is for a fixed term of 89 days, but the hire actually

continues for 91 days with HireCo‟s agreement. The hire becomes

a PPS lease security interest when it actually exceeds 90 days.

Working Example

Help deal with the PPSA and to clear up the issue of indefinite hire

and multiple hires to one customer.

Recommended way of documenting hires for PPSA purposes

where the hirer is a repeat customer.

Sub-hire is problematic under PPSA -sub-hirer must also register

interest

Master Agreements

You would need to perfect (register) any security interest you may have in respect of the

sub-hire. Otherwise if we consent to you sub-hiring our equipment we risk losing title to

that equipment if you do not perfect the security interest by registering on the PPS

Register and your sub-hire customer wrongfully sells it or it becomes insolvent.

1. Have I assessed the risk involved in hiring to this customer?

2. How long is the hire going to last for?

3. Having assessed the risk - do I need to register a security

interest on PPSR?

4. Using a Master Agreement – Register interest on the PPSR

5. Have I pointed out to the customer the Terms & Conditions of

sub-hire?

PPSA Checklist

Visit

www.ppsr.gov.au.

You will need to have

established an

account and a

secured party group.

How to Register Security Interest

7 “Clicks” to

register your

security

Interest.

www.ppsr.gov.au

How to Register Security Interest

About Finlease The equipment finance experts

Offices Australia-wide

Pre-approved funding limits arranged

Property and cash flow funding

Complete debt restructuring available

Established in 1989

Client base >4000 (SME, Large Corporate & Government)

A breath of fresh air compare to the banks

Finlease, a breath of

fresh air compared

to the banks.

Finlease Pty Ltd1300 346 [email protected]

www.finlease.com.au


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