The new national register of Personal Property Securities (PPS) is scheduled to commence on Monday 30 January 2012.

Personal property is defined as any form of property other than land, buildings or fixtures which form a part of that land. It can include tangibles such as cars, art, machinery and crops; as well as intangibles such as intellectual property and contract rights.

The PPS Register will allow lenders and businesses to register their security interests. Secured parties, buyers and other interested parties can search the PPS Register to find out if a security interest is registered over personal property.

A personal property security is when a secured party takes an interest in personal property as security for a loan or other obligation, or enters into a transaction that involves the supply of secured finance.

An example is when a person borrows money from a bank and offers personal property as collateral or security for the loan. The bank’s interest over the collateral is a personal property security.

Buyers also need to make sure that the personal property they are buying does not have a security interest over it. For example, if you buy a car that still has money owing on it; the car could be repossessed by the person who lent money against it.

The reform brings the different Commonwealth, state and territory laws and registers regarding security interests in personal property under one national online PPS Register.

The PPS Register will be web-based and accessible to search and register security interests 24 hours a day, seven days a week.

Business will need to register their legal interests in assets held by another party, to ensure they cannot be claimed by competing creditors if those parties become insolvent.

Essentially, if you own property that isn’t in your possession, for example, subcontracted equipment situated off-site, it is at risk of being lost if it’s not registered.

If security interests are not properly registered, existing security arrangements such as retention of title clauses, leases, rental or hire purchase agreements will not protect businesses from third parties dealing with their assets in an insolvency situation.

For more information visit www.ppsr.gov.au or call their enquiries team on 1300 007 777.