How to Deal with PPSR Expiry and Renewals - 6 Important Lessons

One of the most valuable lessons learned about the Personal Property Securities Register (PPSR) is to renew your registrations before they expire. A hard lesson to learn is the discovery, only after a customer becomes insolvent, that your registration has lapsed. A search of the PPSR reveals that your registration no longer exits. Performing a replacement registration will result in a new start date. Consequently, there will be no PPSR protection for past sales. Even future sales won’t receive protection for another six months if you don’t re-issue your trading terms.

Of course, not all lapsed registrations are bad news. Sometimes it makes sense to allow a registration to expire because the security interest is with a customer with whom you no longer trade.   

So, what is the right way of renewing your registrations? Here are six useful lessons to incorporate within your renewal planning and workflow. Keep in mind that you should speak to a PPSR expert about the best course of action for your circumstance.

# 1 – Don’t renew your transitional registrations if you issued trading terms after the commencement of the PPSR (30 January 2012) 

The moment your new trading terms were issued, your transitional registrations became obsolete for future transactions. After that, a non-transitional registration is required to provide you with ongoing protection.  

# 2 – Watch out for invalid registrations with incorrect grantors

The landmark OneSteel Manufacturing Pty Limited (administrators appointed) [2017] NSWSC 21 judgement confirmed the importance of correctly identifying the grantor. In this legal case, the asset financing and leasing company Alleasing Pty Ltd had incorrectly referenced the ABN when registering its security interest against OneSteel. The court decided that it did not suffice to use an ABN where an ACN was required. Consequently, the registration was considered invalid and Alleasing lost their security.

As part of the renewal process, it’s a good idea to conduct a grantor health check to make sure there are no anomalies that might invalidate a registration. Don’t just check the registrations that are up for renewals, go through all your registrations. An assurance review by EDX from Equifax runs a fine-tooth comb over your records to detect compliance issues and provide recommendations for improvement.

# 3 – Look for other errors that might have made your registrations invalid

Not selecting the Purchase Money Security Interest (PMSI) was an error that frequently occurred early on in the PPSR process. You can’t change a registration later to identify the security interest as the PMSI, so a replacement registration is the only solution. Our Don’t Make These Costly PPSR Mistakes article identifies other potential mistakes that you’ll want to know about before you renew. Remember, a lapsed registration or one with old information is a useless registration.

# 4 – Are you sure every selected customer has a non-transitional registration?

It’s not uncommon for businesses to have customers ‘slip through the system’ without a registration. This mistake occurs even in companies where the policy is to register new customers immediately. To check you haven’t skipped any relevant customers, compare your Accounts Receivable register with the grantors listed on each registration.

# 5 – Only renew active customers 

The above review will also list those registrations that don’t need renewal as your customer is no longer trading with you.  

# 6 – Allow plenty of time

Ideally, the renewals process should be planned out six months in advance. Never underestimate the complexities of the issues you might encounter, or the delays in processing when staff are absent. Consider that you might also need to undertake the time-consuming job of redrafting and re-issuing your trading terms and conditions. 

To help speed up and simplify the renewal process, speak to our team of PPSR experts. Our automated platform, ESIS, can help you figure out which registrations need renewing and how to enter the data onto the PPSR correctly. ESIS handles bulk renewals and uploads with ease.

Would you like a warning when a PPS registration is coming up for renewal? With the EDX software solution, ESIS, you receive an automated notification 120 days out from when a registration is approaching expiry.  

For purpose-fit guidance and exceptional support in validating, updating and renewing PPS registrations, contact our PPSR specialists at EDX by Equifax. With 40 years of combined experience in insolvency and credit management, they make it their mission to help businesses like yours use the PPSR to insulate against risk, including negotiating with insolvency practitioners to protect your rights as a creditor.