The Personal Property Securities Amendment (PPS Leases) Act 2017 (Cth) has been passed by Parliament and is awaiting Royal Assent. It will commence operation on the day after Assent.
UPDATE: Assent was given on 19 May 2017 and the amendments therefore apply from 20 May 2017.
The Act extends the minimum duration of PPS leases (which require registration in order to be given priority against other creditors) from more than one year, to more than two years.
A lease of less than two years, if extended beyond that time, will become a PPS Lease,
Leases of an indefinite term will not be deemed to be PPS leases unless and until they run for a period of more than two years.
Leases (and bailments) of an indefinite term can be registered towards the end of the two year period instead of having to be registered at the start.
However, if a lessor has reasonable grounds to believe that an indefinite term lease will exceed a two year period a registration can still be made prior to the commencement of the lease.
This change does not affect agreements entered into prior to the Act commencement date. The changes will only apply to leases or bailments entered into after commencement.
It is expected that fewer hire and rental industry related transactions will require registration due to the increased minimum duration.