The Personal Property Securities Amendment (Deregulatory Measures) Bill 2014 proposes to amend the definition of ‘PPS Lease’ in the Personal Property Securities Act 2009 (PPSA) so that leases of serial numbered personal property for less than one year will not create a PPS Lease security interest.
This is one of the legislative changes being driven by the Commonwealth Government to reduce red tape.
Currently, a lease of serial numbered property for a period of 90 days or more or for an indefinite period is deemed to give the lessor a security interest called a PPS Lease. To perfect the interest the lessor generally must register on the Personal Property Securities Register (PPSR).
Serial numbered property includes motor vehicles, watercraft, aircraft or registered trademarks, patents, designs and plant breeder’s rights.
If passed, the amendments would mean that a PPS Lease security interest only arises in the case of a lease of personal property (including serial numbered property) for one year or more or for an indefinite period.
This is important because it means lessors of personal property for less than one year will not have a security interest needing to be registered on the PPSR.
This will result in a significant reduction in the number of registrations that businesses need to make under the existing provisions to protect their property.
The proposed amendments would apply to leases entered into after the Bill receives royal assent, so you must still register PPS Lease security interests arising before the royal assent date on the PPSR.