PPSA changes to benefit hire industry
Following on from the changes made to the Personal Properties Securities Act 2009 in October 2015, the Government has now proposed further changes to continue to reduce ‘red-tape’ for the equipment hire industry.
The 2015 amendments meant that currently, registration on the Personal Property Securities Register of leases of serial-numbered equipment is not required to protect the equipment, unless the lease is:
- longer than 12 months; or
- open ended; or
- can be extended without both parties needing to agree.
If the proposed new changes are passed, registration will no longer be required unless the lease term is for longer than two years. Further, open ended leases will no longer need to be registered unless and until they run for a period of more than two years.
The proposed changes will significantly reduce the number of registrations which hire businesses will be required to make in order to protect their equipment, reducing administration and registration costs for those businesses.
Importantly, if the changes are passed, hire businesses will need to cease effecting registrations for leases that do not meet the new criteria, as the leases will no longer constitute registrable security interests.
If you require further information regarding how the PPSA and this change might effect your business, please contact our Commercial + Property Team to obtain further advice.
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