What is PPSR and how does it work?
Personal Property Securities Register, abbreviated as PPSR is an electronic register that allows security interests in personal property to be registered and searched in accordance with the Australian Personal Property Securities Act 2009.
The Government agency responsible for overseeing PPSR in Australia is The Australian Financial Security Authority (AFSA).
The Australian PPSR is an entirely electronic register that is available to users 24 hours a day, 7 days a week and 365 days a year. It provides online searching, registration, and maintenance of financing statements. The Australian PPS Register commenced operation in January 2012.
The PPSR is beneficial to both secured parties; creditors and consumers.
The ideal way for creditors to have a much better chance of retrieving a debt if the debtor defaults, is by registering a security interest on the PPS register.
Section 66 of the PPSR Act contains rules for analyzing and determining priority between security interests in the same collateral. In situations where a creditor doesn’t register a security interest, and a debtor is placed into liquidation or is adjudged bankrupt, secured creditors will be prioritized when assets are distributed, or payments are made.
The PPSR report can be employed to assess the degree of risk that a debtor may pose to a creditor. A creditor may carry out PPSR search to check if a debtor may constitute a threat before entering into a contractual relationship with the debtor.
Below are the ways a potential creditor or consumer may use the PPSR for:
Run a check on the debtor to ascertain whether there is any existing security interest in their collateral. The creditor will know through PPSR report if the debtor still has a number of existing debts.
Run a PPSR check to determine whether the piece of collateral offered by the debtor has been registered as security for another party. This helps to determine whether another party has priority over the property to be used as collateral.
Check collateral on the PPSR database before buying an item. You may also run a PPSR search to see if a pre-existing registered security restricts the item. If the item involved is a car, you may search on the Vehicle Identification Number (VIN). Alternatively, perform a debtor search against the seller of the items.
Consumers can also query PPSR database before buying an item of personal property to establish that there is no money owing on such property. This is especially vital if buying a second-hand car from a private seller - it is possible to search the PPSR database using the Vehicle Identification Number (VIN) to check whether there may be registered security interests on the vehicle.