The awkward moment you buy a boat, take it for a cruise and then get a call from a bank to be informed that your beauty has in fact been used to secure a loan and guess what…the bank now owns your majestic sea vessel.
Talk about a titanic mistake!
To prevent the wreck, the Personal Property Securities Register (PPSR) was created to allow people to check whether the item they are buying has a security interest attached to it or to register any secured interest. This is important as just like in the above scenario, if it is the subject of a security it is possible that the person or entity can repossess it.
What can you search on the PPSR?
The PPSR will let you search online, for most personal property including cars, boats, inventory, plant machinery and artwork. It does not include real estate.
Had a bright idea? Be sure to check the PPSR for intellectual property and investment instruments too! They can also be covered under the national scheme.
By heading to the PPSR website, you can use basic details to start and search and check the registrar. In most instances there is only a nominal fee to do the search, with a certificate provided to show who, if anyone, has a registered interest in the property.
Who can use the PPSR?
The PPSR is an easy to navigate website that can be used by anyone dealing with or owning personal property including:
- Finance Companies- that provide loans on the grounds that they receive a security interest in an item of personal property to register their interest in the property on the PPSR
- Business operators – who sell personal property on credit, or a retention of title arrangement to register their interest in the property on the PPSR; and
- Consumers – Before you go and make a big ticket purchase of a second hand good – such as a car or boat – search the register to be sure the property is free of security interests and is yours to keep.
Do you need to register an interest?
A security interest is one that is used to secure payments of a debt or obligation. The PPSR provides a national register which acts as a billboard, showing the world at large that you have a stake in an item. It is important to register as if the person whom you secured the item from becomes bankrupt, you may risk losing the asset.
Depending on how long you would like the interest to be registered, the cost of being placed on the PPSR is only between $7.40 and $130.00. For most this will be a worthwhile investment to ensure the loan is repaid.
Although it may seem like an additional hassle when purchasing an item, the PPSR allows people to place security interests with confidence. It also allows business and consumers to make informed choices in a transparent way.
Did you purchase property without realising there was an interest? Or are you having trouble using the register or becoming added to it? Here at Lynn and Brown we have an experienced legal team to guide you through the process and ensure your next purchase or loan is properly protected.
About the authors:
This article has been co-authored by Haley Graydon, law clerk, and Steven Brown who is a director at Lynn & Brown Lawyers. Haley is a currently in her final year of study at UWA and her keen interest lies within family law and estates. Steven is a Director and has over 18 years’ experience in legal practice and practices in commercial law, business law and estate planning.