Welcome amendments to the Personal Property Securities Act 2009 (PPSA) have reduced red tape for businesses by amending the definition of 'PPS Lease' under section 13(1)(e) of the PPSA.
On 21 March 2014, in our article ' PPSA Alert – soon a lease of serial numbered personal property for less than one year may not give rise to a PPS Lease security interest', we discussed the proposed amendments to the definition of PPS Lease in the Personal Property Securities Act 2009 by the Personal Property Securities Amendment (Deregulation) Bill 2014.
The Act amends the definition of 'PPS Lease' and applies to leases and hire agreements entered into after 1 October 2015.
The changes mean that a PPS Lease will no longer include a lease/hire of serial numbered goods for a term of less than 1 year.
Under the PPSA, serial numbered goods include motor vehicles, watercraft, aircraft and registered trademarks, patents, designs and plant breeders' rights.
The amendments decrease the red tape and complexities for businesses, particularly small to medium hire and rental businesses who may lease/hire scores of vehicles for terms of less than 12 months. These businesses are no longer required to register a PPS Lease security interest over a lease of serial numbered goods for less than 12 months in order to perfect their interest.
A 'PPS Lease' under the PPSA will now be a restricted to a lease or bailment for a term of more than 12 months or indefinitely, no matter the type of goods leased or bailed.
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