Personal Property Securities Amendment (PPS Leases) Bill 2017 [CTH]

On 1 March 2017, the Federal government introduced the Personal Property Securities Amendment (PPS Leases) Bill 2017 [CTH] (the Bill) which aims to amend section 13 of the Personal Property Securities Act 2009 (the Act) to extend the minimum duration of PPS leases from more than one year, to more than two years.

Amendments in the Bill

This Bill will make minor changes to the regulation of a technical area of Australian commercial law. It will alter a deeming provision concerned with the duration of particular commercial arrangements with the consequence that certain steps need not be taken to protect such arrangements.

This Bill would amend section 13 of the the Act to extend the minimum duration of PPS leases from more than one year, to more than two years. This Bill would also amend the Act to provide that leases of an indefinite term will not be deemed to be PPS leases unless and until they run for a period of more than two years.

This Bill would significantly reduce the regulatory impact which the Act is having on short term hire and rental businesses, the majority of which are small to medium enterprise. The hire and rental sector almost exclusively uses indefinite term leases which usually run for less than a week and rarely exceed a period of two years. Very few hire and rental industry related transactions would be caught by the amended provision due to the increased minimum duration. An amended section 13 of the Act would continue to appropriately capture longer term high value hire and rental industry leases. The amendments would not modify the operation of the Act in relation to leases which are in-substance security interests.

The Bill is currently awaiting Second Reading debate in the House of Representatives.

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products. Nothing on this website should be construed as legal advice and does not substitute for the advice of competent legal counsel.

Personal Property Securities Amendment (PPS Leases) Bill 2017 [CTH] and Secondary materials, as reproduced in TimeBase LawOne