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Late last year, the Personal Property Securities Register (“PPSR”) upgraded its interface to a more user-friendly platform. However, some things have not changed. You will still not be notified by the PPSR ahead of time that your financing statements are due to expire. You will only receive notification that it has expired after the fact, by which time your priority position may have been lost. More on why this matters below.
A financing statement can be registered for a maximum period of five years (this is also the default period, although you can manually enter a shorter period). To retain your priority position, your financing statement needs to be renewed prior to its expiry date. The PPSR will not automatically notify you that your financing statement is due to expire. So, it is important to diarise the expiry dates of your financing statements to ensure that renewal action is taken before the expiry date if required.
If your financing statement does expire, you can register the financing statement again, but your security position will rank behind any prior registered competing security interests. That is, you will go to the back of the queue. This could have a significant impact on your chances of recovery if you need to enforce the underlying security interest reflected by your financing statement in the future. To make sure you retain your position in the queue, diarise the expiry dates of your financing statements and keep on top of your renewals.
If you are unsure when your financing statements are due to expire, how to renew them or you’ve never heard of financing statements or the PPSR, we would be happy to help.
