Personal Property Securities ‑ How These Will Affect You

Do you:

  • Sell goods on credit?
  • Lease equipment or livestock?
  • Have stock on consignment?
  • Have goods, livestock or grain in storage?
  • Provide finance on security other than land?

If so, the new PPS regime will affect you.

The PPS Act (Personal Property Securities Act 2010 (Cth)) is in force and the Personal Property Securities Register [PPS Register] has been open for business from 30 January 2012.

If you are in business dealing with any form of personal property, this is likely to impact on any rights that you may have in personal property which you own, or over which you have a security.

What is Personal Property?

Personal property includes ALL forms of property, whether tangible or intangible, other than land (apart from certain specific exclusions for rights or licences granted by Commonwealth or State laws specifically declared not to be personal property).  It includes tangible goods, crops, livestock, plant, equipment, vehicles and intangibles such as shares, intellectual property, licences and rights under contracts.

What is a Security Interest?

A security interest includes all things which would normally be considered to be a security, such as charges, mortgages, pledges etc.  The definition, however, also includes many other arrangements which may not normally be thought of as a “security”, such as:

  • a retention of title on sale of goods (a conditional sale agreement);
  • a hire purchase agreement;
  • a consignment of goods (whether or not this is a commercial consignment); and
  • a lease of goods.

Normally a security interest is one which secures a payment or obligation, but this is not necessary if property:

  • is on consignment (a “commercial consignment”) for sale or lease (other than for auction or by a well-known consignee);
  • is on lease for more than 1 year, or indefinitely (a “PPS lease”); or
  • is held by a bailee (e.g. for storage) for 1 year or indefinitely (also a “PPS lease”).

So, if you let goods or other property out of your possession or control, even if you remain the owner, you may not be able to recover the property if it is wrongly disposed of, or you are not paid, or if a liquidator or receiver or another party with a security interest takes possession.

What is Required?

Generally, a security interest must be registered on the PPS Register to perfect the security so that it can be enforced.  If a security interest is not perfected, it will not be possible to repossess or sell personal property that is subject to the security interest.

A security interest may also be perfected by control or possession of property, but in the usual case where possession or control is not held by the party with the security interest, it will be necessary to register the interest.

What About Existing Security Interests?

The PPS Act and Register are meant to replace some 70 State and Commonwealth Acts and 40 registers for securities.  Most securities on these registers should have been “migrated” to the PPS Register, but as not all securities have been migrated, and as there have been some errors or omissions, anyone holding an existing security should check:

  • whether the security is one that is migrated; and
  • if so, that it has been properly recorded on the PPS Register.

If the security is not one that has migrated, steps should be taken to register on the PPS Register as soon as possible

ROT Clauses, PMSIs and Proceeds

Existing, and new, arrangements for retention of title for goods sold (sometimes called Romalpa clauses) are specifically deemed to be security interests and should be registered.  Some beneficial provisions of the new regime are that:

  • for the price of goods sold, or for a lessor or bailee under a PPS lease a perfected security interest will be a purchase money security interest (or PMSI) which will give priority over other security interests;
  • the PMSI can include proceeds of the sale of ‘or other dealing with’ the collateral (property subject to the security); and
  • a security interest will continue even if goods are “manufactured, processed, assembled or commingled” in a “product or mass” so that their identity is lost.

To obtain these benefits, your terms of trade or other documents creating the security interest should be appropriately drawn, and the security interest should be registered on the PPS Register.

PPS Registration

A security interest which is not perfected by retaining possession or control should be registered on the PPS Register.  This is done by filing a financing statement electronically and by payment of the appropriate fee (or by hard copy, for an extra fee).

The requirements for completing a financing statement are prescriptive and some are possibly confusing.  It is very important to complete all of the details of a financing statement correctly as otherwise a security interest may not be enforceable.

Fees are charged for registration of interests, and for searches and other matters for the PPS Register.  For on-line registration of security interests (hard copies are more expensive) the fees are:

  • 7 years or less – $7.40;
  • from 7 to 25 years – $37.00; and
  • unlimited time – $130.00.

A separate registration must be made for each security interest, and for each item of collateral, so multiple fees may be incurred.

What Action is Required?

If you do have security interests that are affected by the PPS regime, you should take urgent action to:

  • review your terms of trade or other documents which give rise to security interests to ensure that these are effective and take advantage of any benefits of the PPS Act; and
  • establish a system and appropriate procedures and documents for the filing of financing statements to register security interests on the PPS Register.

When reviewing your terms of trade, you may wish to consider whether alternatives are available to providing credit, or credit merely on the security of retention of title of goods, such as personal guarantees, payment on order or other forms of charge or security.

You should also consider whether security interests can be created for on-going sales or lease arrangements which do not require a new registration, and fees, each time a transaction takes place.


If you are buying property or financing or dealing with a company or other party you may need to check whether prior security interests are registered.  It is no longer possible to search company charges on the ASIC database.

Searching on the PPS Register can be difficult, requires the use of exact matching search terms, and may require searches in multiple fields.  And, there are fees, even if the search does not return a result.


The best advice that can be given in relation to PPS is to take advice.  The PPS Act is 293 pages long (exactly 300 with notes) and is complicated.  It is not possible to accurately summarise all of the provisions of the PPS regime in short notes like these.

DW Fox Tucker will be happy to assist you in reviewing your documents and terms of trade and processes for registration of security interests, and to assist you in registering security interests.

For more information, please contact:
Sandy Donaldson

Sandy Donaldson
p.  +61 8 8124 1954
e.  Email me

This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this article, or what it means for you, your business or your clients' businesses, please feel free to contact us.

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