Here we explain the new Australian Personal Property Registration by giving you a short general overview, then seven things you should know followed by seven examples so you can decide if your business is in an industry which is at risk and give you some idea what to do about it.
How to protect your stuff using the new “PPSA” register
Good news for those of you who could never work out what a debenture really was – debentures are no more.
In law there is “real property” being land, and “personal property” being things not nailed down - cars, washing machines, pianos etc. It is the latter that tends to go missing especially when you are pursuing someone for a debt. We have had to throw out over 70 perfectly good personal property registers, with the consequent loss of Australian legal jobs, in order to follow a one register system worked out by Canada, New Zealand and the US. We Australian lawyers were unable to follow their legislation exactly, as over the years Australia has had some very unique challenges as far as personal property is concerned. Ned Kelly for instance. Some of the differences are subtle, such as when we call it the “Personal Property Securities Act” and the Canadians call it the “Personal Property Security Act”.
What did the Americans call it? I don’t know, but I am guessing something irritatingly more clever than the Canadian lawyers.
What you need to know:
Business owners -
All sorts of security interests can be registered against anything you have bought but not paid for e.g. your stock. So, do a search well in advance of selling your business or be prepared to run round like a scalded cat on the day of sale.
This is all very straightforward, I hear you say. Why don’t we just get rid of our lawyers and do what the American lawyers tell us. If you have ever spoken to an American lawyer, you will know why that is not such a good idea. Anyway, it is not that straightforward.
Seven things to know about the new PPSA legislation
In short, things will go on much as they were before (except for certain industries – see below) it is just that there will be a whole lot of searching going on by us lawyers.
The new personal property legislation – Are you in an AT RISK industry? Seven examples for you to quickly check to decide if your business is at risk
If you are in the business of supplying goods without getting money up front, here are seven examples where you can lose the goods if the customer goes broke or sells up and skips town, if you have not registered your interest:
If the customer who has hold of your goods does not go broke or sell up and skip town there is no problem. But if they do, registering your interest can help you.
Is it more complicated than this? Of course, it is. This is new-fangled US inspired law we are talking about here.
For instance, for contracts entered into before 30 January 2012 the legislation allows you a grace period of sorts.
The legislation does hold risks for certain industries and registration is relatively cheap and simple once you decide where the risks are for you. For more information go towww.ppsr.com.au/. If in doubt, speak to your lawyer.
(c) Paul Brennan 2012. All rights reserved.
Paul Brennan is a lawyer practicing on Queensland's Sunshine Coast. Author of The 10 Greatest Legal Mistakes in Business...and how to avoid them".
The content of this site and the Law & Disorder eZine is to give you legal basics and in some instances included unashamedly to try and make you laugh. In law it is sometimes difficult to work out what is serious and what is just for fun. Therefore, if you plan to do anything legal, rely on your own lawyer’s advice or instruct me to look at the particular facts of your case. Not only will I deny responsibility for the legal content but also for some of the jokes.
© Paul.email@example.com 2012.