Serial numbered goods under the Person Property Security Act (“the PPSA”) include motor vehicles, aircraft and vessels. Under the PPSA, leases of serial numbered goods for more than 90 days are deemed security interests, and therefore required registration.
The Personal Property Securities Amendment (Deregulatory Measures) Act, which commenced on 1 October 2015, amends the PPSA so that generally speaking, leases of serial numbered goods will not need to be registered if the term of the lease is 12 months or less. Leases or bailments for terms of less than 12 months will only require registration if they “in substance” secure payment or performance of obligations (such as finance leases).
The changes were introduced to reduce the costs of compliance with the PPSA for small businesses. This will benefit hiring companies, service providers and contractors. However, the changes are not retrospective, and security interests in leases of serial numbered goods for more than 90 days that were entered into before the changes take effect still need to be registered.
Leases and bailments of serial numbered goods that are for an indefinite term or for more than 12 months must still be registered.
Businesses should now ensure that their registration policies and procedures be reviewed in respect of leasing, hiring and bailment of serial numbered goods.
For more information, contact Natalie Ledlin, Lawyer & Practice Director
Direct Line: 02-8488-3383