The Australian Hire Industry and PPS Leases

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Over recent years the Personal Property Securities Act 2009 (PPSA) has resulted in many hire businesses losing ownership of equipment due to failing to register the equipment correctly under the PPSA which leaves them open to risk when customers become insolvent.

This loss is due to hire businesses being unaware of the PPSA, or not managing to navigate the complex registration regime. As a result of these issues, the Government has introduced the Amendment Act in which a lease or bailment only becomes a ‘PPS Lease’ when:

  1. The agreed term, including any options, exceeds two years; or
  2. It continues for more than two years.

The amendments remove leases and bailments ‘for an indefinite term’ from the definition. A hire for an unspecified term is now not caught until it lasts more than two years.

These changes vastly reduce the regulatory impact of the PPSA on short-term hire and rental business, therefore, hire businesses should consider whether it is necessary to register at all.

Consequently, if equipment is being hired out, for a period less than two years, and the company hiring the equipment enters into liquidation, the liquidator is unable to access that asset as part of the liquidation process.

If equipment is being hired out for an extended period of time, the hire business must take careful consideration in registering the equipment under a ‘PPS Lease’.

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Raea Khan Circle
Director Lawyer
Raea Khan

Raea is Managing Director and Principal Lawyer for PBl Law Group. Raea assists clients with major projects, property developments, construction and strata law.

He has worked in Western Australia and Queensland assisting with expansion projects in the energy and resource sector and now predominately advises clients in Strata and Community Association matters.

He is a member of the Australian College of Strata Lawyers where majority of his work is advising developers and owners corporations with dispute related minor and major defects, strata governance and common property litigation. He is proficient at leading negotiations and meetings.

Raea has a particular interest in the commercial aspect of any dispute and always tries to weigh up the risk, reward and benefit of legal proceedings at each different stage.

Raea enjoys all forms of competitive sport, including Crossfit and actively participates in Triathlons, representing Australia as an age group athlete. He was a member of Red Head Surf Lifesaving club.

  • Strata Law
  • Construction & Major Projects
  • Commercial and Business Law
  • Planning & Environment Law