The PPSA came into force on 30 January 2012. The purpose of the PPSA is to create a single register for all personal property securities.
The PPSA is widely drafted to cover security interests that were not traditionally registrable or indeed regarded as security interests and that can have implications for landlords and tenants.
Whilst the PPSA expressly notes that personal property does not include land and fixtures, the PPSA does apply to what is termed a PPS lease which means a lease of good (in certain circumstances which are detailed further in Section 13 of the PPSA). Goods could include items such as plant and equipment or fitout that is leased to a tenant under a lease of land or part of a building. This is particularly relevant in the case of incentive agreements where a landlord intends to retain non fixed items of a fitout such as furniture, following expiry of the lease.
If a landlord fails to register its security interest in the plant and equipment of fitout then its rights in such items may be lost, if for example a tenant’s financier registers a security interest over the tenant’s assets.
Therefore, in certain circumstances, security interests created by leases of property should be registered on the Personal Property Securities Register in order to protect the interest of the landlord.
The Personal Property Securities Register could be of assistance to a landlord intending to exercise rights over property left behind in premises by a tenant. The landlord could search to ascertain what (if any) third party security interests exist in respect of property left behind.
The PPSA can be applicable to leases entered into before and after the commencement date on 30 January 2012. However the PPSA contains transitional provisions which expire on 30 January 2014. These provide some protection for landlords in respect of PPS Leases pre 30 January 2012. Landlords have until 30 January 2014 to perfect their security under these PPS leases. Landlords are therefore advised to review their existing leases and obtain advice as to what steps should be taken to protect their interests. Landlords should also consider the facts of each new lease they enter into to ensure that any security interests within the ambit of the PPSA are properly registered.
This is an area of law that will develop as time goes on. Please do not hesitate to contact us if you would like any assistance from either landlord or tenant perspective.