It’s now been a couple of years since the PPSA (Personal Properties Security Act) commenced, and one of the issues that we’ve had clients come across is when a security interest has been lodged against them on the register that is either inaccurate, or wrongly registered.
This might happen for a number of reasons, not least of which appears to be that many old registrations automatically appeared on the register as part of the “migration process” when the register commenced 2 years ago, and simply haven’t yet been cleaned out because no-one has complained.
This can cause many problems to a business. For example if you are seeking finance, or if you are looking to sell your business, you might find that the incorrect registrations could be standing in your way (without you even realising it). And the longer you leave it, the more time consuming it is to clean up.
So what can you do?
- Start off by making sure that you understand what is listed on the register against your business – do a search.
- If you find incorrect registrations, then get the details of who the “secured party” is.
- Make contact with them directly requiring them to fix the error.
- If they won’t respond in a reasonable period of time, then you might want to consider sending an amendment demand. The Personal Property Securities Act 2009 sets out suggestions for the content of the amendment demand.
- If this doesn’t produce any joy, then there’s a process by which the Registrar is notified with an Amendment Statement. The Registrar then also contacts the secured party with an Amendment Notice, giving them generally 5 days within which to respond. If there’s no response, the Registrar can make a decision to issue a financing change statement to have the registration amended or removed. In the alternative, the Act also allows for a judicial process, so there is an avenue for a court order relating to amendment demands as well.
As you can see, there are a number of steps you can take, but the process might take some time, so don’t leave it until you need a clear report in a hurry. You never know when you might need to get finance, sell your business, or when you might run into a supplier who is cautious about security interests registered against you.
Contact us on 02 8006 0830 or [email protected] if you need help with a security interest that’s been registered against you that needs to be addressed, of if you have any other questions about the PPSA.
Disclaimer: The material contained on this website is provided for general information purposes only and does not constitute legal advice. You should not depend upon any information appearing on this website without seeking legal advice. We do not guarantee that the contents of this website will be accurate, complete or up-to-date.