The start date for the Personal Properties Security Act (PPSA) has been confirmed by the Attorney General to be Monday, January 30, 2012.
The Federal Government’s Personal Property Securities ACT (PPSA) Reform is going to be bringing about some changes to the rules that govern home loan products.
These changes should be carefully noted by anyone looking to take out home loans for purchase or refinance in 2012.
For the purposes of the PPSA, the definition of ‘personal property’ is any form of property other than land, buildings or fixtures. In essence, ‘personal property’ describes any items belonging to you that are not attached to the land and can easily be moved away from the land. Shares are ‘movable’ entities and as such shares in Company Title unit as well as cash security are considered ‘personal property’.
- those providing vendor finance;
- those selling goods on credit;
- those leasing motor vehicles, plant and equipment or other assets;
- those providing stock or other assets on consignment to third parties;
- those granting licences to other parties to use products, trademarks or other intellectual property;
- those subject to a charge;
- those in the business of financing;
- those dealing with chattel mortgages or retention of title arrangements;
- those hiring purchase agreements; or
- those thinking of buying or selling a business.
How does the PPSA effect home loans?
The PPSA may or may not impact those who are looking to top up the loans or taking out new loans with existing securities which are now considered ‘personal property’. You will be effected by the changes if you used securities that now fall under the ‘personal property’ category as your security for your home loan.
If your existing securities were shares of Company Title unit or cash deposit then your bank will require you to register your security interest in the Personal Property Register (PPR) and you will need to sign new re-issued security documents.
Failure on the part of the home buyer to register may have dire consequences. If you fail to register your personal property in the Personal Property Register (PPR) you may be found in breach of your loan terms.
If you have any questions or need to know more about the new Personal Properties Security Act (PPSA), please join the conversation in our Disqus comments’ section below to have a live broker assist with your enquiry.