Personal Property Security

Personal Property Security

Be Aware of How Personal Property Is Protected

The Personal Property Securities Act has changed the way security interests in personal property is registered.

Personal property is generally any property other than land.

Examples of security interests can include a hire / purchase agreement or leased equipment; generally, when one party takes possession of property that does not belong to them, either because they are hiring it, or still paying it off under finance or otherwise.


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The person or company who actually owns the item wants to protect its interests in those items until they are paid off or returned.

Previously there were a number of laws and different registers dealing with personal property security, but this has now changed and there is now only one national register known as the Personal Property Security Register.

This Personal Property Security Register allows businesses to register a security interest that they have in particular property. Any interested party can search the Personal Property Security Register to determine if any security interest is held in the property being searched.


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For example, people buying property such as a generator, a crane, or truck will need to confirm that the property they intend on buying is free from any other interests in it, such as to ensure no money is owed on it by previous owners, as it may then be the subject of repossession.

The new laws in this area are far from simple and require a detailed understanding as to how they work in order to ensure interests are protected.

For instance, the concept of “priority” has been introduced. That is, any security interest in personal property must now be registered to ensure priority over competing interests. Simply having ownership over the property will no longer be sufficient protection.

Generally, the first to register their interest has priority over subsequent registrations. Registration of an interest means an interest has been “perfected” and “perfected” interests take priority over interests which are “unperfected”.

Obtaining advice and guidance on the use and interpretation over these security considerations is imperative to ensure your interests are secured.


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Impact on Construction Industry

Relevantly, these changes have impacted various aspects of the construction industry.

For example, the right to use and dispose of contractors’ equipment may be affected. Normally, if a contractor defaults in the work it is doing, a principal could take the equipment and use it to finish works left incomplete by the contractor. Now, such interests need to be registered by the principal, as other parties may have an interest in this equipment.

Another consideration is temporary works. Usually, contractors will leave their property on site during construction. Such property is usually of a temporary nature and may include things like scaffolding and formwork. The new scheme means that contactors should register their interest in these items, because they may be seized by others with a security interest. Particular care must be taken in detailing temporary works in any contract entered into.

There are numerous other considerations such as those relating to leased equipment, where owners cannot simply rely on their ownership and supply agreements, where suppliers would maintain their legal interest in items that are still being paid off by another party.

General Comments

The changes mean that parties must reassess what they consider to be a security interest and ensure it is registered. Monitoring and maintenance of the security register and an individual party’s interests and commitments are required to ensure all interests are updated and enforceable.