PPS leases definition to be amended

The Commonwealth Government has introduced the Personal Property Securities Amendment (PPS Leases) Bill 2017 into Parliament.

If passed, the Bill will amend section 13 of the PPS Act so that a lease or bailment of goods is a PPS lease which requires registration in order to preserve its priority only if it is for a term of more than two years (instead of the current one year minimum) and provide that 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.

The Bill would significantly reduce the regulatory impact which the Act has on short term hire and rental businesses. The hire and rental sector almost exclusively uses indefinite term leases which usually run for less than a week and rarely exceed a period of two years.

The amendments would not modify the operation of the Act in relation to leases which are in-substance security interests.

Leases of serial numbered goods such as motor vehicles, aircraft, watercraft and other items will only need to be registered if the lease is for more than 2 years.

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