Chapter 29
Summary of Key Changes to the Previous Law
- 29.1 Summary of key changes to the previous law
- 29.2 Security agreements are not available from the PPS Register
- 29.3 Super-priority security interests – PMSIs and security interests perfected by control
- 29.4 Secured parties can perfect to defeat existing security interests of which they have knowledge – knowledge is generally not relevant to priority disputes between security interests
- 29.5 45 day window to register security interests changes to 20 business days
- 29.6 Security interests over ADI accounts
- 29.7 Following collateral upon transfers
- 29.8 Extinguishment rules upon transfers of collateral
- 29.9 Security interests automatically attach to proceeds generated upon disposals of original collateral
- 29.10 Restrictive covenants against the sale of collateral or the grant of further security
- 29.11 Receivables financing
- 29.12 Tacking of further advances is permitted
- 29.13 Conflicts of laws rules
- 29 14 Serial numbered property
- 29.15 15 business day “silent equipment PMSI” risk
- 29.16 Receivers, controllers or secured parties can sell leased or retention of title property if the lease or retention of title transaction is unperfected, or trumped for priority
- 29.17 Circulating security interests (floating charges) attach immediately to after-acquired property without appropriation
29.8 Extinguishment rules upon transfers of collateral
The PPSA establishes around ten (10) extinguishment rules to determine when security interests are extinguished when collateral is sold or transferred by way of lease1.
These rules are new and highly complex, but with any luck they should bring more clarity to the rights of stakeholders when collateral is transferred.
For example, a buyer or lessee of collateral for value which is subject to an unperfected security interest takes the collateral free from the security interest, regardless of whether the buyer/lessee has knowledge of the unperfected security interest – section 43. See Chapter 21 (The extinguishment rules) for discussion.
Notes:
1 PPSA sections 43 to 52
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