200,000 PPSR registrations to expire by 30 January 2019 - is yours one of them?Dec 2018
- Between now and 30 January 2019, 200,000 PPSR registrations will 'expire' – including 115,000 expiring on 30 January 2019 alone.
- A registration cannot be renewed once it has expired.
- If your registration expires, you may lose priority and potentially, your ranking and status as a secured party.
- It is possible to order a report to see which of your registrations will expire in the coming weeks and extend your registrations prior to expiry.
January 2019 marks the seventh anniversary of the introduction of the Personal Property Securities Register (PPSR). A registration period of seven years is often the default chosen by a secured party when registering a security interest because it is the least expensive registration option. However, it is possible that the term of the underlying security interest might continue for longer than seven years or the secured party and the grantor may have varied arrangements in the interim which have extended the term since the initial registration, but not updated the registration period on the PPSR.
To maintain security and priority, it is vital that secured parties review their PPSR registrations and, where necessary, extend them as soon as possible. The PPSR is a 'to the second' regime – if a secured party’s registration expires at 23:59:59 on 30/01/2019, then the registration will lapse automatically at 00:00:00 on 01/02/2019 and cannot be renewed. If a registration expires, then a secured party may renew the registration but it will only take effect from the date of the renewal, meaning that the secured party will lose its initial position of priority and will rank behind earlier in time competing registrations over the same secured property. Further, if the grantor is a company and it becomes insolvent within six months of the new registration, then the security interest vests in the company for the benefit of all creditors - meaning the secured party risks losing its interest in the property to a liquidator or administrator.
Secured parties can download a free report that provides a list of registrations due to expire in the coming months by logging into the PPSR. A guide on how to order the report can be found at https://www.ppsr.gov.au/registrations-due-expire-report. The end date can be extended for a fee of $6 per registration. Secured parties should also take this opportunity to review the details of registrations and confirm that they are still current and put in place a process for managing the expiry of existing registrations.
It is important to note that, when extending an end date, a secured party cannot amend any other details of the registration (e.g. details of parties or collateral type). Where the details of a registration need to be updated, this must be done separately.
Carter Newell can assist you in reviewing your secured interests reports and advising on amending registrations to extend the period of security or making other necessary amendments. Please contact either of the authors of this article if we can be of assistance.
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