The Personal Property Security Register (PPSR) and its effect on you as an individual and if you are in business
It is important for people to understand that the PPSR was set up to register security interests over personal property as opposed to real property (land).
Security usually arises out of a loan that is made by the person seeking to register the security on the PPSR showing that they have an interest in the property until such time as the loan is paid out or where property owned by that person is in the possession of another party.
The registration with the PPSR means that anybody who purchases this personal property will take it subject to the debt and the registered creditor on the PPSR is entitled to repossess the property if the original borrower attempts to transfer the property to another person for consideration or without consideration.
This becomes a very important aspect for every day life as many people are buying secondhand property online and if this is so, then ideally the purchaser should search the PPSR to ensure there is no money owing relating to the piece of property they are purchasing.
Obviously, this is going to be more important with more expensive purchases and it is absolutely essential to do this when purchasing a motor vehicle. The means of searching is by the name of the person who is selling and their date of birth. If it is a motor vehicle you need to search the VIN number.
A search with the PPSR can be done on line for a small fee of $16.30.
The situation relating to the PPSR also applies very much to the purchase of a business and in this situation, the person selling the business should make a search of the PPSR to ensure that any old loans are cleared as it is sometimes the situation that the security is left on the register after the loan has been paid out. It is essential that a purchaser make a full check of the PPSR relating to the entity that is selling and also appropriate for the directors themselves to be searched in circumstances where a company is selling the business. Similarly with a personal situation, if there are motor vehicles they should also be searched by their VIN number.
Simply precautions relating to the PPSR can avoid financial loss of some significance and it is a matter for each and every one of us to think about this when purchasing goods.
To be absolutely abundantly sure, a PPSR search could be made in relation to purchases of goods from commercial entities however it is very unlikely that there would be encumbered goods being sold but still possible.
One of the most important thing is to advise your children when buying motor vehicles as young people tend to be buying secondhand vehicles and often on line with entities such as Gumtree. Obviously, Gumtree and other similar entities do not guarantee that the person placing the advertisement for sale owes no money on the property being advertised.
If you would like Jack to address a particular legal issue, send your request to jack.blaxland@ticliblaxland.com.au
This article is intended to be for information and educational purposes only and cannot be relied upon as legal advice. The information may not apply to your circumstances or to your particular situation. If you need specific advice or you have any questions, we welcome you to contact us directly.
