Removing Security Interests on PPSR
We had a recent enquiry from a client who was unsure as to what their obligations were when removing an interest on the Personal Property Securities Register (PPSR).
By way of some background, an interest was originally recorded on the PPSR several years ago following the purchase of a motor vehicle. Soon after funding, the account fell into an arrears state and the customer and security were unable to be located. After lengthy enquiries both the customer and security were located and the account eventually settled.
It is our policy that upon finalisation of a debt that notification is forwarded to our client to ensure that they take all relevant steps to update any adverse listing with a Credit Reporting Body (CRB) as well as updating the security interest on the PPSR. To our surprise, several months later, we received a letter of demand from the customer demanding that the interest on the PPSR be removed. Following enquiries with our client they had apparently overlooked removing their interest as they were unsure of their obligations.
So what are your obligations when it comes to removing a security interest on the PPSR? The PPSR Timing Rules state -
Within 5 working days from the day it becomes clear that there is no longer a belief that a security interest exists (such as when a deal is no longer going ahead or you no longer have a security interest in the collateral)
In the event that an interest is not removed the other party does have recourse including approaching the Australian Financial Security Authority (AFSA) or applying to the Court for removal.
Disclaimer: This article is general information only and does not constitute legal advice and is not intended to be relied on in any way.