Business Law Articles
HHG Legal Group
West Perth, Australia
From a date yet to be fixed (which could be as early as 1 October 2015), those in the business of short-term vehicle, mobile plant and equipment hire will no longer have to register, on the Personal Property Securities Register, their security interest in each individual item that they hire out. Since the Personal Property Securities Act 2009 took effect six years ago, individual registrations have been the only way to protect most short-term hire companies’ right to be paid hire charges and to protect hired goods from being seized and sold in the hands of insolvent customers’ liquidators to satisfy their debts to priority creditors. This is because of section 13(1)(e) of the Act which provides that a lease of serial-numbered goods for 90 days or more, or less than 12 months, constitutes a “PPS lease”. This provision has affected most of those in the business of short-term plant and equipment hire, because the definition of “serial numbered goods” under the Act is wide enough to include cars, trucks, bulldozers, bobcats, other earthmoving and mining plant and equipment, caravans, watercraft and even forklifts.
The amendment is good news, particularly for smaller operators who have had to dedicate substantial resources to the registration of each individual transaction in goods which often diminish in value quite quickly (particularly in the case of mining plant). But the changes do have their limits, applying only to leases:
(a) entered into before the legislation commences;
(b) for a term of less than 12 months; and
(c) that are incapable of being renewed beyond a twelve-month term.
To learn more about how to adapt your business and IT systems in line with these changes and to maximise the commercial advantages available as a result of this change, contact our one of our Personal Property Securities Act specialists on (08) 9322 1966 or visit our website: www.hhg.com.au.
For more information about HHG Legal Group, please visit the International Society of Primerus Law Firms.