Security Interests under the Personal Property Security Act
Transitional Arrangements to end on 31 January 2014!
- The Personal Property Security Act (PPS Act) came into law on 30 January 2012.
- The PPS Act established the Personal Property Security Register (PPS Register), where all security interests in personal property can be registered.
- Suppliers of goods can register their legal interest in the goods on the PPS Register.
- A registered interest overrides the interests of other creditors of the purchaser.
- Many businesses have not understood and implemented this major reform.
- For instance, many businesses still rely on the “retention of title” clauses in old terms and conditions.
- After 31 January 2014 these old security agreements will no longer protect supplier’s interests.
- As of 1 February 2014 any old security interest which has not already been registered on the PPS Register will lose its priority to newer registered security interests.
- If you are relying on an old security interest recorded in your terms and conditions of trade now is the time to act.
- You must register your transitional security interest on the PPS Register on or before 31 January 2014 to ensure that the priority which the security provided by your agreement is not defeated by a security interest created and registered later.
Please contact Bay Legal for urgent advice regarding the security you currently have over goods that are in the possession of your customers.