The government of Jamaica plans to enact very soon a new law governing the creation of security interests in personal property (i.e. all property that is not real property). The Act, when passed, is likely to affect existing provisions in Jamaican law concerning taking, perfecting and enforcing security over non-real estate property, whether tangible or intangible.

The new secured interests legislation is only one of several new Bills being fast tracked by Jamaican lawmakers in order to satisfy structural benchmarks set by the International Monetary Fund (IMF) as conditional to its four-year Extended Fund Facility (EFF) approved on May 1, 2013. The EFF is intended to provide financial support for Jamaica’s comprehensive economic reform agenda. In Jamaica’s “Letter of Intent” to the IMF dated April 17, 2013, one of its many commitments is to “Establish a Secured Transactions Framework to facilitate improved access to credit through the inclusion of movable property as allowable forms of collateral” including to:

  • Table the Secured Obligations Bill in Parliament by August 2013; and
  • Establish and operate the Central Collateral Registry by December 2013

The Status Quo

It should be noted that, despite the wording included in the Letter of Intent, under current Jamaican law, movable property is already an allowable form of collateral, with security being granted on a regular basis over chattel such as motor vehicles, equipment, machinery, and even household furniture and electrical appliances. However, there is no central registry for such security, and registration procedures are diverse. Security over personal chattel is usually given in a document called a “Bill of Sale”, which must be recorded at the Island Records Office within 30 days, failing which it will be void against, inter alia, assignees of the grantor’s estate or property under bankruptcy or insolvency laws and assignments for the benefit of the grantor’s creditors. The Records Office does maintain a paper record of the documents recorded, however searching its books is an onerous and time consuming task unless one has some idea of both the borrower and the creditor and the time period in which the Bill of Sale was recorded.  Additionally, for a charge given by a company registered in Jamaica or with an established place of business in Jamaica, its particulars must be delivered for registration to the Registrar of Companies, otherwise it is void against a liquidator or creditor of the company. Liens over motor vehicles are also registered with Tax Administration Jamaica’s motor vehicle department, which will note the lien on the title of the relevant vehicle. Security over registered trademarks must be registered with the Jamaica Intellectual Property Office, and until such a registration application has been made, the security is ineffective as against a person acquiring a conflicting interest in the registered trademark without knowledge of the security interest.

Probable Changes

Various Acts, including the Bills of Sale Act, Companies Act, Trade Marks Act, and Hire-Purchase Act, are likely to be amended by the new Act. There are plans to establish a simple, central, and internet-based system of filing and searching for security interests in all non-land assets, so that potential lenders can easily discover if potential borrowers have already charged assets over which security is being granted. The government has also stated that it hopes to broaden the set of assets that can be pledged as collateral. It will be interesting to see how this will be achieved, because even now there is theoretically no limit to the assets that can be charged as security, however there is a limit to the types of collateral that lenders find acceptable to mitigate credit risk. Perhaps an uncomplicated system for registering and ranking security over assets not traditionally given as security will provoke a change in creditors’ outlook.


The government’s objective, expressed in the press on various occasions over the past two years, is that the new secured interests legislation will improve the climate for doing business in Jamaica, leading to higher levels of investment and economic growth. It is hoped that improving the certainty and simplicity of taking collateral will increase the flow of credit in the economy, especially to micro, small and medium-sized enterprises. In order for this objective to be achieved, the legislation ultimately passed will need to be compatible with Jamaica’s current legal framework and concepts and the realities of Jamaican creditors and borrowers, even as it attempts to bring revolutionary simplicity to the relevant procedures.