So what is PPSR, and how does it all work? Well, if you’re in the market for a car, bike or boat, it can be a valuable tool to protect your assets.
As many Australians already know, protecting your assets is big business. Unfortunately, staking your claim to these assets and protecting them accordingly is often linked to a significant amount of paperwork. From property to cars and even recreational items like boats and caravans, following the right procedures linked to registering these items and insuring them isn’t always an easy task.
Imagine this: after no doubt working and saving diligently to purchase these big-ticket items, a third party swoops in and claims legal ownership on one of your assets – and like it or not, it does happen. It’s vital to check a used vehicle for existing financial interests prior to purchasing it. If you fail to do so and the previous owner still had money owing against it, the financier could potentially repossess the vehicle if the previous owner does not settle their debt.
The alternative is getting familiar with the Personal Property Security Register, or PPSR. Although one of the lesser-known ways to protect your assets, the process can help you to make informed decisions and potentially avoid a financial disaster – but what is PPSR, and how can the average person leverage this service?
In the world of finance, a security interest is a legal right granted by a debtor to a creditor over the debtor’s property. In turn, this enables the creditor to have recourse to the property if the debtor defaults in making payment or otherwise performing the secured obligations.
In simple terms, the Personal Property Security Register is a database of security interests on personal property, but not of property ownership. Taking the time to register on the PPSR is a way to let the general public know that there are security interests linked to personal property, such as cars, goods or company assets.
While the PSSR helps protect consumers when they are buying cars, motorbikes, boats and other personal assets, and provides a basic check for financial interests, written off records and stolen vehicles, it can also help businesses and individuals to purchase these types of items without any potential surprises further down the track. Motor vehicles, boats, aircraft, aircraft parts, plant machinery and even intellectual property can all be individually searched in various ways on the PPSR, such as VIN or chassis number for cars, serial number for boats or patent number for intellectual property.
Registering your security correctly on the PPSR can protect you in the long term and give you additional rights to the registered property. This is also especially important in the event that the person who gave you the interest goes insolvent. A formal registration on the PPSR also offers other protections such as ranking you at a higher priority over other potential security interests.
However, grasping what the PPSR is, is not just something that the average consumer should be familiar with, as it’s businesses and companies that often find themselves linked to issues with security interests. If your business has a security interest in property, such as if you’re a lender who has accepted a car as collateral, then you can register your interest to officially mark yourself as having certain legal rights over the property.
If you’re new to the process, it’s important to note that anyone can make a registration on the PPSR, including businesses, individuals, and organisations. As a general rule, it will be the person who has the security interest in the property. They are known as the ‘”secured party” and can include –
Ultimately, the PPSR is often your only go-to for registering your business security interest over property, and for making sure you are purchasing the full title and ownership of property, and not unknowingly buying something that someone else already has a claim to.