PPSR: Protect Your Assets & Improve Your Debt Collection Process

Is the equipment securing a letter of credit unencumbered? Is the car you are buying owned by the seller? If you are someone in the business of buying, selling, financing, or leasing personal property in Australia, understanding the Personal Property Securities Register (PPSR) https://www.ppsr.gov.au/ can help you protect your assets and improve your business dealings.

In this article, we’ll dive into the ins and outs of the PPSR with a specific focus on how this can help you protect your assets and improve your debt collection process if you are in the business of extending lines of credit.

What is the PPSR?

The Personal Property Securities Register is the Australian go-to for tracking security interests in personal property. It is an official government register where lenders and businesses record their claims on property that isn’t land or buildings.

A security interest means the car could have money owing on it and could be repossessed from you even though you’ve paid for it.

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If you are a buyer or a business extending credit with real property security, by searching the register (for a small fee, $2 for a car search), you can see if there’s a hidden debt on the item, which means someone else could take it away if the seller doesn’t pay up. It protects you and your business from unknowingly buying or extending credit with strings attached. Think of it PPSR as a safety check!

What type of personal property securities are registered?

PPSR protect your assets

Almost any movable good (excluding land or buildings) can be registered if a security interest exists. The PPSR in Australia commonly sees registrations for:

  • Automotive: Registration is beneficial when selling, financing, bailing, or leasing cars, trucks, motorcycles, imported RVs, caravans, boats, trailers, and even machinery like tractors and diggers. Spare parts that are taken by the purchaser but whose legal title remains with the seller can also be registered.
  • Business assets: This covers equipment, inventory, and other valuable items used for business operations.
  • Boats and other watercraft: Like vehicles, registration helps ensure clear ownership and protects against hidden claims.
  • Construction: Registration is also beneficial when selling, bailing, leasing or hiring out construction plant and machinery, either separately or as part of works contracts, supply of goods, equipment leases, fleet management services, and/or fleet rental services.
  • High-value goods: These are expensive items like furniture, jewellry, or electronics.
  • Intellectual property. Security interests in intellectual property, like trademarks and patents, can be registered.

It’s always a good practice to check the register before making significant purchases or offering secured credit facilities, especially for items where hidden claims could be a risk.

How to conduct PPSR checks in Australia?

You can perform a PPSR check yourself on the PPSR’s official website: https://www.ppsr.gov.au/searching There are different types of searches you can do on the PPSR portal. Among others, you can perform:

To understand your search results, refer to this guide https://www.ppsr.gov.au/searching/do-used-car-or-vehicle-search/understand-your-car-search-result If the PPSR search yields positive results, chances are the property has money owing on it.

Why is a PPSR Check Crucial?

Whether you’re eyeing a used car, boat, or machinery, a PPSR check reveals any existing debts tied to it from the previous owner, safeguarding you from potential repossession risks.

For sellers, conducting a PPSR check ensures there are no lingering debts, making your asset more enticing to prospective buyers. Lenders and finance companies also benefit by registering a security interest, securing priority over other creditors if a borrower defaults.

How much does PPSR check cost in Australia?

A PPSR check is $2. There may also be other fees for other services, per this table of fees https://www.ppsr.gov.au/about-us/laws-rules-and-regulations/fees-using-ppsr

SBR Client Recoups $126k with Help from PPSR

One of SBR’s Clients lodged a $126k debt sometime in 2023 for a debtor that is non-contactable, with its website and phone number disconnected. The debtor has advised in this application that he was property-backed. After a few months of due diligence on the part of SBR which involved filing and serving to the debtor a Statement of Claim and skip tracing, SBR received an update that the debtor was in liquidation and was going to auction off its assets to pay off creditors.

It was a good thing that the SBR Client was wise enough to lodge a PPSR against the debtor and thus, it was included in the lineup of parties who have an interest in the debtor’s property. After a couple of months, when liquidation of the debtor’s assets had concluded and funds from liquidation became available, the SBR Client was paid in full.

PPSR puts you first in line

If you are lending or giving credit over affected personal property, the securities register enables you to register your security interest to give you the best priority and best position should your debtor go broke, so that others dealing with the debtor or the property can search and find your interest. Registering a PPSR and/or doing a PPSR check will help your invoices get paid ahead of others.

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