Over the past few months we have been working closely with clients, accountants and other advisers to assist them in developing and implementing a Personal Property Securities Act Implementation Plan.
Key points of any Implementation Plan are;
- Reviewing all commercial arrangements with customers to identify those that will fall under the new laws;
- Amending existing and pro forma contracts to reflect new terminology and new requirements;
- Confirming that all existing and new customers have received a written form of contract and that they have accepted the terms of that written contract as required by the new laws;
- Identifying existing arrangements that need to be registered on the PPSR as transitional interests or which should be updated and registered as new interests;
- Ascertaining any interests which have been automatically migrated to the PPSR (eg interests recorded on REVS or the ASIC charge register) and taking steps to claim these interests through the PPSR;
- Updating policies and procedures to put in place appropriate measures that ensure;
- all the information required to search the PPSR and register an interest is obtained (eg to search or register against an individual you must have their date of birth);
- all relevant searches are undertaken in relation to new customers and existing customers;
- all necessary documentation is provided to customers and is signed by them;
- that interests are registered on the PPSR in the required timeframes (which in many instances will need to be BEFORE any goods or equipment are delivered to the customer); and
- any changes in arrangements with a customer (eg customer changes address or ceases to be a customer) are updated on the PPSR;
- Establishing responsibilities for attending to registrations of interests on the PPSR. This may be an in-house responsibility or may be outsourced to accountants, lawyers or other service providers;
- Training staff on the use of the PPSR for searches and registration of interests; and
- Putting in place an appropriate review or audit process to ensure on an ongoing basis that all arrangements affected by the new laws are registered on the PPSR and those registrations are kept up to date.
The new laws do have transitional provisions. Your existing rights under contractual arrangements entered into before 30 January 2012 will not be affected. However, if you take on a new customer or if you vary your arrangements with an existing customer (eg vary your terms of trade or supply different goods or equipment than you have previously) then you will need to register those interests on the PPSR.
Our advice is if in doubt you should register your interest and register it as soon as possible. In many instances you should even register an interest before you have transacted with a customer. Valuable rights can be lost if you don’t register in certain timeframes and other creditors may be able to stake a claim in your goods and equipment, even though you still own it.
Should you have any further questions, please contact an advisor at Walker Wayland