Personal Property Securities Act
The Personal Property Securities Act 1999 (The PPSA) introduces a significant change to commercial law as it has been practised in New Zealand. The PPSA is new legislation that reforms the law relating to security interests in personal property, by replacing the Chattels Transfer Act 1924, the Companies (Registration of Charges) Act 1993, Motor Vehicle Securities Act 1989, and the Industrial and Provident Societies Amendment Act 1952. It affects lending, leasing and other types of credit-providing activities and provides a single set of rules for security in all finance transactions, except those involving real estate.
The PPSA reforms the law relating to security interests in personal property and, in particular it provides for:
- The creation and enforceability of security interests in personal property;
- The determination of priority between security interests in the same personal property;
- The determination of priority between security interests and other types of interests in the same personal property; and
- The establishment of a register of security interests in personal property called the Personal Property Security Register (PPSR). The PPSR will function as an electronic notice board accessible to any one on the Internet 24 hours a day, 7 days a week. The lender will register a "financing statement" which includes information concerning the loan, the borrower's name and the security details. For more information go to the PPSR website.
Under the PPSA, the emphasis is on the substance rather than form of the security agreement. This is very different from the situation prior to the PPSA where form took precedence over substance, often regardless of the intentions of the parties.
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