Take note that from 30 January 2019 security interests registered for 7 years will begin to expire.
After its commencement in January 2012 many businesses registered security interests on the Personal Property Securities Register (PPSR) with a 7 year renewal option. Nearly 7 years has passed since registrations on the PPSR commenced and they are about to start expiring.
Once a registered security interest expires it can no longer be renewed. Therefore, it is imperative that renewals are commenced in a timely manner and sooner rather than later. You can, and should, extend your PPSR registration ahead of time.
If your security interest lapses and you register the interest again you run the risk of losing the protection that you may have enjoyed had the security interest been renewed, for example:
- Subject to exceptions, due to the first-in-time approach of the priority rules for enforcing security interests, if your business allows its PPSR registrations to expire so that a new security interest needs to be registered on the PPSR then, unless an exception applies, your business will go to the back of the security interest enforcement line. This means that you may miss out on money owed to your business in the event you need to rely on the security interest.
- If the business granting your business the security interest becomes insolvent within 6 months of the security interest being re-registered after it has lapsed your security interest may not be effective. Again, you may miss out on money owed to your business.
Where to Begin?
Identify what security interests you have registered on the PPSR and when they expire. Diaries the expiry date and set a reminder well in advance of expiry to renew the registration. Check all the information is correct and seek assistance if in doubt.
The first 7 year PPSR registrations are coming up for renewal from 30 January 2019.
Renew your PPSR registrations well in advance of expiry prevent the security interest lapsing and losing protection for your business.
Take steps not to miss your renewal deadlines by identifying expiry dates and setting renewal reminders well ahead of the renewal deadline.
It is likely to be a busy time for renewals so don’t delay!