What is the PPSR?
The Personal Property Securities Register (PPSR) is the official government register of security interests in personal property. When a person or business borrows money or purchases personal property on credit terms (such as a car or items of stock), the debt secured by that property is registered on the PPSR. The register acts as an online public noticeboard detailing all registered security interests held in personal property throughout Australia.
Why is it useful?
Searching the register is particularly important when making purchases or lending money.
A search of the PPSR will identify security granted by a person or business over either specific items of property or broad categories of goods. The presence of a PPSR registration may indicate that the personal property is encumbered by debt and/or at risk of repossession.
Similarly, where you or your business are lending money or supplying goods on credit, it is essential to ensure you have a process for PPSR registration. Although it is not compulsory to register an interest, registration will perfect the security.
If your interest is registered, you will take priority over any unregistered interests regardless of the order in which they were created.
Commonly, individuals search the register when purchasing a used car or other vehicles. Such purchases can be risky, and searching the register will identify whether the vehicle has any debt registered against it, is stolen or has been written off.
You must ensure you have a valid reason to search the PPSR using an individual’s details. Searching for an individual without an authorised search purpose can attract penalties.
The PPSR website indicates that valid reasons for searching the register include when you:
- are searching on your own details;
- have been given the person’s consent to search using their details;
- are considering providing credit to the individual;
- are considering going into business with or investing in the individual;
- have a security interest already over the individual’s property; or
- need to check if there is a security interest registered against the individual’s property.
The PPSR is an essential tool for businesses in protecting their own assets and identifying potential security claims against suppliers and businesses they deal with.
Businesses often undertake PPSR searches against other businesses or individuals when:
- Purchasing valuable second hand goods, to ensure they are unencumbered; and
- When entering into an agreement to lend money or extend credit, to secure repayment with personal property.
When should a search be conducted?
You should undertake a PPSR search on the day or the day before your personal property purchase. The closer to the purchase the more up-to-date information you will receive, further protecting you from risk.
For more information on the PPSR and registering or searching security interests contact us on (02) 9525 8688 or at email@example.com.