Alert: Is your business involved in the lease or hire of equipment?
The Personal Property Securities Amendment (PPS Leases) Bill 2017 (Cth) was passed by the Australian Parliament on Thursday 11 May 2017
The major change to the PPSA is to extend the minimum duration of PPS leases from more than one year, to more than two years and to provide that leases of an indefinite term will not be deemed to be PPS leases unless and until they run for a period of more than two years. The aim of the changes is to significantly reduce the regulatory impact which the Act is having on short term hire and rental businesses, the majority of which are small to medium enterprise. The hire and rental sector almost exclusively uses indefinite term leases which usually run for less than a week and rarely exceed a period of two years. Very few hire and rental industry related transactions would be caught by the amended provision due to the increased minimum duration. An amended section 13 of the Act would continue to appropriately capture longer term high value hire and rental industry leases. The amendments would not modify the operation of the Act in relation to leases which are in-substance security interests.”
The change came into effect on 20 May 2017 and means leases and bailments that were entered into on or after 20 May 2017 will be subject to the new PPS lease definition.
If you hire, rent or lease out goods this change may affect you.
It is important to note that this change does not affect agreements entered into prior to 20 May 2017.
Click here to read more about the changes.Back