The Australian Parliament has recently passed legislation amending the Personal Property Securities Act 2009 (PPS Act) in order to reduce the number of lease transactions deemed to be ‘PPS leases’ under section 13(1)(e) of the Act. The Government is working toward commencement of the amendment on 1 October 2015.
The amendment repeals section 13(1)(e), which deems leases of serial numbered goods such as motor vehicles, aircraft, watercraft and other items, to be PPS leases for the purposes of the Act if they have a fixed term between 90 days and one year. This means that businesses which frequently use fixed term leases of serial numbered goods of this duration, and have arrangements to register those leases, may no longer need to make these registrations once the amendment takes effect.
This reform was endorsed by the recent independent review of the PPS Act and will align the Australian rules with personal property securities (PPS) regimes in other common law countries (such as New Zealand and Canada). In these jurisdictions, a lease is deemed to be subject to PPS laws where it has a fixed term of more than 12 months or an indefinite term.