Important proposed amendments to the meaning of a ‘PPS Lease’ in the Personal Property Securities Act.
On 1 March 2017, the Federal Government introduced the Personal Property Securities Amendment (PPS Leases) Bill 2017 to:
- amend section 13 of the Personal Property Securities Act 2009 (Cth) (PPSA) to extend the minimum duration of PPS Leases from more than one year to more than two years; and
- provide that a lease of an indefinite term will not be deemed to be a PPS Lease unless and until it runs for a period of more than two years.
The purpose of the Bill is to significantly reduce the regulatory impact the PPSA is having on short term hire and rental businesses, particularly business that almost exclusively use indefinite term leases that usually run for less than a week. If the Bill is passed, section 13 will still operate to capture long term hire and rental leases.
The Bill is not intended to be retrospective. An existing lease or bailment of goods deemed to be a PPS Lease before the Bill is enacted will not be affected by the changes.
Please note, the Bill has not yet been passed and is currently awaiting its Second Reading. It may be some time before it is enacted and the amendments take place – so for the time being, it is important to continue to ensure that all PPS Leases of more than one year are registered.