Budget Update Notice: The 2026/27 Federal Budget contains proposals that may affect the information in this article. As at the date of this notice, these are proposed measures and have not yet passed into law. We are reviewing and updating our content as the legislative process progresses. If you are making a decision based on any of the matters discussed here, please contact us for advice that reflects the current and proposed position.
The Personal Property Securities Act 2009 (Cth) (PPSA) commenced on 30 January 2012 and continues to govern security interests in personal property throughout Australia. It affects almost all personal property – generally, this is anything other than land.
It does not just affect banks and lenders. If you are a manufacturer, supply goods on credit, lease equipment, operate a franchise or work on construction projects, then you need to understand these rules.
The PPSA deems many ordinary commercial arrangements to be a “security interest”. “If you have a security interest and fail to properly perfect or register it where required, you may lose priority in the property or, in some circumstances, lose the benefit of your interest altogether.
For example:
- ‘Retention of title’ clauses, which are typically used by suppliers to retain title to their goods until payment is received, will now be treated as a ‘security interest’ under the PPSA. These interests will need need to be registered on the Personal Property Securities Register (PPSR), to preserve priority against competing claimants.
- Other ownership interests, such as ownership of leased assets, will in some cases be deemed to be ‘security interests’, and title to your equipment can be lost if appropriate steps are not taken under PPSA.
The following case studies illustrate these points.
Case Study 1
PurchaseCo grants an ‘all-assets security’ to BankCorp (i.e. the equivalent of a pre-PPSA ‘floating charge’). BankCorp registers this security interest immediately under the PPSA.
A month later, SupplyCo supplies goods to PurchaseCo on a retention of title basis. SupplyCo doesn’t register this, relying instead on the fact that it has explicitly ‘retained title’ to the goods.
PurchaseCo enters into receivership and SupplyCo wants to take back its goods.
Unfortunately for SupplyCo, it has an unregistered security interest. This means that because BankCorp has a prior registered security, it is able to take possession of all assets in Purchaser’s possession, including SupplyCo’s goods. This is regardless of the fact that title in the goods never passed to the PurchaseCo.
SupplyCo could have protected itself by registering its security interest.
Case Study 2
HireCo is in the business of leasing building equipment for large building projects. It hires out a crane to DeveloperCo on a long term basis and the crane is stored on DeveloperCo’s land. HireCo doesn’t register this – after all, it still owns the crane.
This is a risky move by HireCo under two scenarios:
1) DeveloperCo goes into liquidation. The crane will vest in DeveloperCo; that is, HireCo loses its ownership of the crane and it now belongs to DeveloperCo, whose creditors will enjoy the proceeds.
2) DeveloperCo sells the crane to NewBuyer, even though DeveloperCo doesn’t have an ownership interest to allow it to do so. The crane will belong to NewBuyer.
The main point – you must ensure you have registered ‘security interest’ under the PPSA in order to retain ownership of their assets. If you don’t, you may lose your interest in the assets. This is the case even if you still legally own the assets – if they are in another person’s possession and they haven’t registered their security interest when they should have, they will lose them.
We can assist you to understand the opportunities and risks associated with this new regime. We can put in place the right documents and processes to protect your interests.
Call us on 1300 654 590 or email us if you would like to ensure that you retain you personal property and security interests.
The information contained in this post is current at the date of editing – 10 June 2026.
