At LCollect we believe that knowledge is power. Every month our debt collection blog gives you practical tips, stories and news from around Australia and the world.
Do you know when your interest on the Personal Property Securities Register (PPSR) is due to expire?
It can be one of the more challenging things that we come across in the debt collection industry. A customer has relocated several times over a number of years however the debt is believed to be secured by an asset which, if repossessed, may finalise the debt or may entice the debtor to enter into a repayment arrangement which is maintained. Upon conducting a search of the PPSR it's then found that the security interest has lapsed. You now have essentially an unsecured debt with very little or no bargaining power.
While many organations used to employ a specialists securities agents this role has gradually been phased out and is now considered a day-to-day role of administration staff who may or may not keep an accurate register and may not know or realise the implications of the interest lapsing especially where a debt has been written-off. If this sounds familiar did you know that if you have a PPSR login that you can generate a report called Registrations Due to Expire?
The report includes information such as:
Personal Property Securities Act 2009 - Section 165 Defects in Registration - Particular DefectsFor the purposes of paragraph 164(1)(b), a defect in a registration that describes particular collateral exists at a particular time if any of the following circumstances exist:
In the recent decision of Forge Group Power Pty Limited (In Liquidation) (Receivers and Managers Appointed) v General Electric International Inc  NSWSC 52 (11 February 2016) the importance of perfecting your interest under the PPSA was emphasised.
GE leased 4 Gas Turbines (electricity generators) to Forge Power who subsequently went into administration. GE did not register their interest under the PPSA.
The rental term over 2 years provided for a total of $33 million in payments. Payments commenced January 2014. Forge Power entered administration 3 months later in March 2014.
GE attempted to argue that there were two exceptions available to it under the PPSA:
The consequence of not perfecting their interest meant that the turbines became available to the liquidators and GE became an unsecured creditor.
Please note that this article does not constitute legal advice and should not be relied on as such.
“This isn’t being done by licensed repairers - in most instances it’s not financially viable for genuine repairers to repair these cars using legitimate parts. “In many cases, it’s being done by unscrupulous operators in backyards and workshops using stolen parts, who then sell the vehicles to unwary motorists.
“Some consumers are being taken for a ride - motorists might be driving around in what’s effectively a stolen vehicle.
“More importantly, many of these vehicles have had dodgy repairs which can mask major structural damage. It’s extremely unsafe.
“Car re-birthing is a significant problem which has been known to have links to organised crime syndicates.
“Today’s announcement will put a massive dent in these illegal operations.
“It’s estimated that as many as six out of ten of the 20,537 repairable written-off vehicles presented for re-registration in 2009 posed serious questions about the origin of the parts used to repair them.
“Around 19,000 vehicles were stolen in NSW in the 2008-09 financial year – of these, around 5,700 have not been recovered.
“Today’s announcement means any car which is written off will not be able to be reregistered even if it can be repaired.”
Mr Campbell said the NSW Government made the decision to ban repairable write-offs after a discussion paper was released for consultation in August last year.
“What we found was that consumers – as well as legitimate car dealers and repairers – wanted better protections in place,” he said.
“NSW is the first state to introduce this ban on repairable write-offs, and we would encourage other states to follow our lead and implement similar laws.
“There will be very limited exemptions to the new laws – for some vehicles written off because of hail damage, and for some classic antique cars.
“We will also strengthen written-off vehicle notification requirements – for example, vehicles currently being sent to a scrap yard for crushing are not required to be registered on the Written-off Vehicle Register (WOVR) and this presents an additional opportunity for rebirthing.”
Mr Campbell said the new laws are on top of the RTA’s Vehicle History Check service launched last year.
“The RTA’s Vehicle History Check service allows potential buyers to check whether a used car has ever been written-off anywhere in Australia,” he said.
“The service also provides customers with details of a car’s history including the number of previous owners, when it was first registered in NSW and odometer readings.
“All you need is the car’s registration plate details, vehicle type and the last four digits of the VIN/chassis number,“It’s a simple check you can do on the RTA website for under $20.”
We have recently had 2 different examples where the security of a loan has been jeopardised and our ability to repossess the security has been limited through REVS listings not being performed in a timely manner.
The scenarios were:
It is therefore important to ensure that your listing with REVS is current & does not lapse