| Focus: | Personal Property Securities Act 2009 (Cth) |
| Services: | Financial Services |
| Industry Focus: | Financial Services |
Legislation has now been passed amending the Personal Property Securities Act 2009 (Cth) (PPSA) to reduce the number of leases deemed to be 'PPS leases' under s13(1)(e) of the PPSA.
The effect of the amendment is that a lease of serial numbered goods for a term of 90 days or more, but less than 12 months, will no longer need to be registered as a PPS lease to preserve its priority and provide protection for the lessor on insolvency of the lessee. Serial numbered goods include motor vehicles, caravans, forklifts and watercraft.
The amendment only applies to leases entered into after the legislation commences, and it will not affect leases with a term of more than 12 months or leases capable of being renewed beyond a 12 month term.
The main impact of this amendment is likely to be on businesses in the short-term hire and rental industry, as well as their financiers.
The Attorney-General's Department is seeking industry input on an appropriate commencement date for the amendment. Currently, the amendment is set to become operative on 26 December 2015 if no commencement date is designated, however the Department proposes an earlier date of 1 October to coincide with the second quarter of the financial year.
The amendments are deregulatory in nature and should reduce the work that hire and rental businesses, as well as their financiers, need to undertake to comply with the PPSA. However, transitional work may still be required, such as adapting business processes, training, documents and IT systems, especially those that interface directly with the PPS Register via the Business to Government (B2G) portal.
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