Yesterday the Personal Property Securities Amendment (PPS Leases) Bill 2017 (Cth) was passed by the Australian Parliament.
The Explanatory Memorandum for this amendment says:
“This Bill would amend section 13 of the Personal Property Securities Act 2009 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.”
It will now go to the Governor-General of the Commonwealth of Australia, His Excellency General the Honourable Sir Peter Cosgrove AK MC (Retd) to receive Royal Assent before becoming law, which we expect to happen in the coming days.
The Bill will commence operation the day after Royal Assent, and will be notified via announcements on the website and Register.
For information about the amendment and how it might affect your business see Key legislative changes and PPS case lawPeter Edwards
Personal Property Securities