The Personal Property Securities Act 2009 (NSW) (the PPSA) section 12 defines a security interest as “an interest in personal property provided for by a transaction that, in substance, secures payment or performance of an obligation.” This section also provides a helpful list of examples of a security interest.
Section 21 of the PPSA then deals with how to perfect your security interest to ensure you are a priority, secured creditor.
In order for a security interest to be perfected it must be:
- attached – attachment occurs when the party granting security has rights (or the power to transfer rights) in the property and does an act (for example executing a security agreement) that creates the security interest;
- enforceable against a third party – a security interest is enforceable once it is attached and either the secured party is in possession or control of the property or the security interest has been registered; and
- registered and, or in possession or control of the secured party.
As is shown by the above, steps 2 and 3 are interconnected and mutually reinforcing.
Regardless of the security interest and the property, all security interests should be registered on the Personal Property Securities Register at a minimum.
Please contact Walker & George to discuss managing, perfecting and enforcing your security interests.