Hidden interests…buyers beware!
Persons who obtain finance, more commonly commercial, car or personal finance, a security interest is generally registered on the Personal Property Securities Register known as the PPSR. In doing so, they are securing their interests on the borrower’s personal property, such as cars, boats, plant and equipment, but does not include land, certain licences and a few other exceptions. While registration of a security interest is not compulsory, a financier (secured party) may lose its priority to the personal property if it is in competition with other security interests.
If you are looking to purchase business, plant, equipment, car, boat, trailer or the like, a search of the person and/or company in ownership of the property is a must as part of your due diligence. At settlement and transfer of the property you have a right to clear and free possession of that property from the seller. If the personal property is under finance and the PPSR charge is not released when the property is transferred to you, the financier has a right, in the first instance, to repossess the property should the seller default on their loan arrangement. It is important that any security interests are discharge prior to the property being transferred to you.
The PPSR is a single national register for personal property security interests and an online noticeboard of the particulars of a security interest for a particular individual or company.
Follow the link below to find out more information about the PPSR: https://www.ppsr.gov.au/ppsr-overview
If you wish to discuss your own secured property or that of a sellers please contact our legal team on 03 5278 95000 or email legal@cannygroup.com.au