What is Personal Property Securities?
The PPS Act 2009 applies to security interests in personal property, including goods and chattels, financial property, shares and intellectual property. In other words, if someone ‘buys’ an item but still owes money on the item, the party who is owed money can note their interest in the item on the Personal Property Securities Register.

The PPS Act does not apply to land, buildings or fixtures forming part of land.
In terms of buying real estate, the Buyer is entitled to receive personal property free from encumbrances, therefore it is important to ensure there are no security interests noted on personal property part of a real estate purchase.
What items are normally covered by the PPS register in a real estate transaction?

Often a contract includes personal property / chattels, such as air conditioning units, oven, rangehood, satellite dish, window furnishings, carpets, clothes dryer, washing machine, dish washer, furniture, solar panels, water tanks or pumps. Any of these items may have loans on and should be released at the property settlement and therefore are important property to do a PPSR check on.

How do we ensure the property is free from encumbrance at settlement?

Your property lawyer, on the Buyer’s instruction, will do a PPSR search and if there are any PPSR notations, they will arrange for a release of the notations at settlement by the Seller. Often the amount owing on the item will be settled from the Buyer’s money due to the Seller at the property settlement. This way the Buyer will receive an unencumbered item at settlement.

Nothing worse for a Buyer than finding out after settlement there is still money owing on an item and you need to pay additional money for it to become yours.

It is important to discuss the any personal property you are acquiring in a real estate transaction with your property lawyer.