Personal Property Securities Act and Leases
The Personal Property Securities Act 2009 (Cth) (PPSA) came into force on 30 January 2012 and introduced new rules for the enforcement and priority of personal property securities interests with respect to personal property. Examples of personal property securities interests include fixed charges, floating charges, chattels mortgages, hire purchase mortgages and equipment leases, etc. Land and fixtures on land are not however subject to the PPSA.
In general, therefore, the PPSA does not apply to leases of land. There are, however, some circumstances in which the PPSA will apply to leases, including the following:
(a) Where a landlord also leases plant or equipment to the tenant;
(b) Where a cash security deposit is paid;
(c) If the landlord makes a contribution to the tenant’s fit-out; and
(d) When the lease ends and the tenant fails to remove its property from the premises.
Depending upon the circumstances, in any of the situations above a landlord may need to register on the Personal Property Securities Register (PPSR) to protect its interest in the leased chattels, the cash security deposit, the fit-out or the abandoned property.
If a landlord fails to register, or if another organisation or person registers its interest on the PPSR with respect to the same property prior to the landlord doing so, then the landlord will lose its rights with respect to that property.
If you are a landlord of premises to which any of the above apply, you should contact us for advice as to whether you need to register your interest in property on the PPSR and the process by which to do so.
Author: Cathy Drake
Published: 3 April 2014