Introduction
The Personal Property Securities Act 2009 (Cth) (PPSA) affects
the giving and taking of security interests over assets (other than
land and certain leases). It has been in force in Australia since
January 2012. However, many businesses remain unaware of the PPSA
and the serious implications if things go wrong.
Prior to the PPSA, a lease arrangement was not considered to be
a traditional security interest. Now, a lease of equipment, for
example, may give rise to a security interest. Unless that
equipment is registered on the online Personal Property Securities
Register (PPSR), you may lose title to the equipment if your
customer becomes insolvent.
The first part of this briefing paper highlights the importance
of the PPSA to the equipment hire industry by looking at the first
major court decision under the PPSA in Australia. The second part
seeks to address some PPSA-related scenarios that may arise in a
typical equipment hire business.
