PPS leases of serial numbered goods registration change from 1 October 2015

On 1 October 2015 changes to the Personal Property Securities Act will commence. The changes remove the provision that deems a lease or bailment of serial numbered goods which have a fixed term between 90 days and one year to be a security interest.

From 1 October 2015, a lease or bailment of serial numbered goods for a term more than 90 days will no longer be characterised as a security interest under the PPSA unless they are for a term in excess of 1 year. These changes are not retrospective and will only affect a lease or bailment for more than 90 days but less than 1 year, entered into on or after 1 October 2015.

Lenders, lessors and hirers of serial numbered goods such as motor vehicles, watercraft, aircraft or other equipment should continue to register security interests created before 1 October 2015 and which have a term of between 90 days and 1 year.

These changes do not affect leases or bailments (including for serial numbered goods) with a term of more than 12 months or an indefinite term, which will still be deemed to be a security interest and will still need to be registered.

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