The Australian Parliament has recently passed legislation amending the Personal Property Securities Act 2009 (PPSA).

The amendment is set to repeal s13(1)(e) of the PPSA. Section Section 13(1)(e) currently provides that a lease of serial numbered goods (such as a motor vehicle, aircraft and watercraft) is a PPS lease for the purposes of the PPSA if it is for a term of 90 days or more.

When s13(1)(e) is repealed, any lease of serial numbered goods for a term of less than 12 months will not be a PPS lease.

The amendments will come into effect on 1 October 2015.

The amendments will only apply prospectively, that is to all leases and bailments entered into after 1 October 2015. In the circumstances, practitioners dealing with insolvent entities will have to take into consideration the two sets of applicable rules in respect of PPS leases.

For more information please contact ERA Legal.