A quick search of the Personal Properties Security Register (“PPSR”) is an efficient way for a purchaser to determine whether any charges or security interests have been registered against the property of another party, which might burden the purchaser’s title to the property it proposes to acquire. This is an important step which can help purchasers to decide, in light of any security interests, whether to proceed with a transaction.
Accordingly, it is important to ensure the PPSR accurately reflects any security interests granted over a party’s property, so that prospective purchasers can find out what they are buying into. It is the responsibility of the parties to ensure the PPSR is up-to-date; if a security interest has expired, or the transaction to which it related is no longer current, the parties should ensure the security interest is removed from the PPSR.
In our experience, parties are usually very proactive in ensuring the registration of security interests, but not always so proactive attending to removal once the security interest is no longer relevant. As a result, a security interest can lie dormant on the PPSR until a prospective purchaser rightfully starts asking questions.
For this reason, it is good practice to regularly review the security interests registered against your organisation and its property and, where necessary, arrange for the removal of any security interests which are no longer relevant. This can avoid issues down the line, and may ultimately help minimise costs and delay when selling or transferring property.