If you are a secured party on the Personal Property Securities Register (PPSR), you should be acutely aware of 30 January 2019. This is the day that the PPSR passes it’s seventh year, and importantly is the date that the first seven-year registrations made on the PPSR will begin to expire.
Seven years is the maximum time a registration over items with serial numbers can subsist without needing renewal. These are items commonly registered on the PPSR and include assets like cars and boats, and intellectual property such as trademarks and patents.
Priority of interest on the PPSR is important because it determines which creditors are paid first out of the proceeds of selling the secured asset. Expiration of a PPSR registration opens a secured party up to being classed as an ordinary unsecured creditor. It effectively places them to the back of the priority queue, behind secured creditors that have renewed their registrations. A secured party cannot renew a registration once it has lapsed and maintain their spot in the queue.
Putting off renewal of a security interest can accordingly have disastrous consequences, with no priority of interest if the grantor of a security gets wound up and the asset is sold to pay other creditors. It is vital that you diarise any dates that your PPSR registrations are set to lapse, or even better, get to renewing them as soon as possible.
So be sure to not forget the PPSR’s birthday this year.