Quick Summary of The PPSR Regulations For NZ
The PPSR is an electronic registry that contains information regarding money owed by debtors and who they owe it to (creditors). Searches can be done in the PPSR to determine if money is owned on personal property before a purchase is made. For example, if you purchase a used car, you want to make sure that it is not encumbered by a bank loan in someone else’s name.
Under the PPSR Regulations, a Financing Statement must be completed by the debtor, and if the debtor is an individual then their full name must be listed on the Statement. The debtor’s name must be the same as what appears on their official documentation including driver’s licence, passport, birth certificate or certificate of New Zealand Citizenship. If the debtor’s name is one word, it must be entered as both the first and the last name of the debtor.
Description of Collateral
The collateral must be described under one of the options listed, those being goods: motor vehicles, aircraft, livestock, crops, other, documents of title, chattel paper, investment securities, negotiable instruments, money, intangibles and a further description needs to be assigned if there is no specific collateral type.
If goods have a serial number then those goods need to be described so that a determination can be made whether the goods are an aircraft or a motor vehicle, their year of manufacture, who the manufacturer is, a vehicle id number, chassis number, aircraft class, registration mark or serial number. If the goods do not have a serial number, then there must be an ID number marked on the item.
Other Data
The registration term must be specified if it is less than five years. The electronic mail address of the both the secured and registering party must also be included if they are different.
Financing Change Statements
The Financing Change Statement must include a registration number so that it can be paired with the statement it relates to. The type and change to be made to the financing statement should be included along with the renewal period if applicable.
Process
A search of the PPSR will find any liens on property and money owed on personal property. The details on the PPSR are removed once the debt has been repaid. Whether you want to buy, sell, lease or hire out goods or sell some goods on a consignment plan, you could be at risk if the customer defaults and you don’t receive all the funds that you are owed. In order to get your property back you need to have it registered in the PPSR so that it could be repossessed if the customer defaults with their payments.
The PPSR will protect the property by proving a seller’s legal claim to it if payments are not honoured. Checking into this register helps to reduce the risk on investments, offers access to credit information and helps people to make a better and more informed decision on purchasing.
When goods are sold on credit the buyer will sign a contract which establishes the rights of the seller to the property if the buyer does not pay. There could also be other creditors in that line that take priority over a buyer if they have PPSR registered prior to yours. By registering in the PPSR creditors receive priority in the order in which they register to have the ability to be paid.
Anything that has value (except land) including ships, cars and buildings can be used to secure a debt. If you are a buyer, taking the extra step of searching the PPSR can provide you with the assurance that you need that you are purchasing an item that is not financially encumbered. You certainly do not want to purchase a vehicle only to have it repossessed because the previous owner has defaulted on the loan payments.
When you make a purchase on credit you will most likely be listed as a debtor in the PPSR. When you conduct a PPSR search you can check the information that is registered against your name and confirm that it is the most up to date and accurate information available such as your current address and employer. When a person is trying to make a larger purchase, the PPSR is also used by companies to check on the creditworthiness of that person. If they happen to have a history of not making payments on time or defaulting on their credit, they will probably be turned down on a credit purchase.
Using the PPSR
If you want to access the PPSR you will need to understand the legal terms that are used on the site. Rights to personal property are granted to a creditor (seller or lender) by a debtor (borrower or buyer) and this is known as collateral or a security interest. There is usually a security agreement in place if an offer of credit is given or a loan is granted. Interests that are to be recorded on the PPSR require all the correct information to be supplied, such as the details of the item or property that is encumbered, who the debtor is and who you are or who your company is. All this information is collected on a document called a “financing statement”.
Whoever registers the financing statement is known as the “secured party”. Anyone who wants register or search on the PPSR system is required set up an online services account and create a login and an individual or as a representative of a company.
The PPSR can provide you with the answers that you need regarding your credit, what may be outstanding against your name or if items you want to purchase are encumbered. Before you make any large purchases, it is always prudent to conduct the necessary searches to ensure that you are getting an item that is free and clear and won’t be repossessed from you because a former owner didn’t make their loan payments.
