There’s a PPSR over my business entity. What is it? Does it affect the house owned by the business?

The Personal Property Securities Act 2009 (PPSA) introduced a national registry that records security interests over personal property. This is called the Personal Property Securities Register (PPSR). It is like a noticeboard that tells people if there is a security interest over personal property but it doesn’t say who owns the property.

When an asset is registered on the PPSR it means that someone (usually a bank or financial institution) has registered that they have a security interest over that property.

If you have rights over personal property, like a debt or obligation, you can register a notice on the PPSR. If you are planning on purchasing or leasing property you can also check the PPSR to see if anyone else has registered an interest over it. This will then protect you if you go through with the transaction.

What assets are covered by the PPSR?

The PPSA covers personal property. This includes most types of property but specifically excludes land, buildings or fixtures. Property that is covered can include:

  • Motor vehicles or boats
  • Crops or livestock
  • Stock in trade
  • Equipment
  • Intangible property like copyright, debts and bank accounts
  • Financial property like shares and cash
  • Artwork

So is the house covered or not?

The PPSR doesn’t cover houses and specifically excludes furnished residential property. If your house is used for business or commercial purposes then any personal property related to the house will be caught. This may include intangible property attached to the house (like rights under a licence or lease) or any equipment or assets that are not fixtures to the house.

So what does this mean?

If you are selling your business or any of the assets in it, then the purchaser may check the PPSR to see if there is a security over any of the personal property. They may also want to include a clause in the contract of sale that deals with any securities over the personal property or to ensure the security is removed.

To make sure any sale can go ahead and the registration can be removed on the assets it’s a good idea to speak to PMF Legal to help you find the best way to do this.