Personal Property Securities Amendment (PPS Leases) Act 2017

The Personal Property Securities Amendment (PPS Leases) Act 2017 is a short Commonwealth amending Act. Its purpose is to amend the Personal Property Securities Act 2009, not to replace it. For business readers, that distinction matters. This Act only changes part of the existing PPSA framework, so it should be read together with the current consolidated principal Act.

The official text shows five direct amendments to section 13(1) of the Personal Property Securities Act 2009. In summary, paragraph 13(1)(a) was amended by replacing “one year” with “2 years”. Paragraph 13(1)(b) was repealed. Paragraph 13(1)(c) was amended by replacing “one year” with “2 years” wherever it occurred. Paragraph 13(1)(d) was amended so that the first occurrence of “one year” became “2 years, or a lease for an indefinite term”, and the second and third occurrences became “2 years”.

The practical point is that this Act changes part of the definition settings around PPS leases in section 13. It does not rewrite the whole PPSA. Businesses should therefore avoid treating this amendment as a complete answer on registration, priority or enforcement. It is a targeted change to one part of the broader system.

This amendment is most relevant where one party gives another party possession of goods under a lease or bailment arrangement. That often arises in ordinary trading activity, not just in specialist finance transactions. Equipment hire businesses, plant and vehicle lessors, logistics operators, suppliers using structured possession arrangements, and businesses that place goods with customers or related entities should all pay attention.

It also matters for businesses on the receiving side. If your business uses leased or bailed goods in operations, the legal character of those arrangements can affect due diligence, financing and insolvency risk analysis. Buyers and lenders commonly ask who owns the goods, who possesses them, how long the arrangement runs, and whether PPSA steps should have been taken.

The Act itself does not list industries or carve-outs. So the practical way to assess scope is to look at your conduct. If your business regularly allows another party to hold goods for a fixed period, a rolling period or an indefinite period, this amendment may be relevant to your contract review.

The official amendment text makes three practical trigger points stand out. First, term length matters because the amended provisions replace certain one-year references with 2 years. Second, indefinite-term leases matter because paragraph 13(1)(d) now expressly refers to a lease for an indefinite term. Third, timing matters because the application provision only applies the amendments to leases or bailments entered into after commencement.

For business owners, this means the legal label on the document is not enough. A contract called a hire, loan, storage, service or bailment arrangement may still need PPSA review if another party has possession of the goods and the term structure falls within the amended framework. The real arrangement, the contract date and the duration mechanics all need to be checked together.

Common trigger points include long fixed terms, automatic renewals, holdover periods after expiry, repeated short extensions that leave goods in place for a long time, and open-ended arrangements with no clear end date. Indefinite continuation is especially important because the amendment now expressly mentions it.

The Act received Royal Assent on 19 May 2017. Under section 2, the whole Act commenced the day after Royal Assent, which was 20 May 2017.

The Schedule also inserted an application provision into Schedule 1 of the Personal Property Securities Act 2009. That provision states that the amendments of section 13 made by this Act apply in relation to leases or bailments entered into after that section commences. In practical terms, this means the amendment only affects leases or bailments entered into after 20 May 2017.

This is an important dividing line for businesses with older contract books. If you have arrangements entered into before 20 May 2017 and others entered into after that date, do not assume the same section 13 analysis applies across all of them. Separate your contracts by entry date before making decisions about risk, due diligence or PPSR practice.

This Act does not create a fresh list of standalone compliance duties. Instead, it changes the section 13 settings that businesses need to use when assessing whether a lease or bailment falls within the PPS lease concept under the principal Act. The practical obligation is therefore to review affected arrangements accurately and under the current law.

Start with the contract file. Check the date the lease or bailment was entered into, the stated term, any renewal rights, any holdover or continuation clause, and whether the arrangement is fixed-term or indefinite. Then compare the paperwork with what actually happens in practice. A short agreement that is repeatedly extended may need closer attention than its original label suggests.

Businesses should also review internal templates and processes. If your forms, checklists or PPSR assumptions were built around the old one-year wording, they may now be out of date for post-20 May 2017 arrangements. This is particularly important for businesses that regularly place goods in another party's possession.

Because this Act only amends part of the PPSA framework, businesses should also check the current consolidated Personal Property Securities Act 2009 before relying on any simplified rule of thumb. The amendment is important, but it is not the whole analysis.

For most businesses, the best starting point is not a legal summary but the actual records. The amendment focuses attention on term length, indefinite-term drafting and entry date, so your documents should be reviewed with those points in mind.

Look at the signed agreement, schedules, renewal notices, extension emails, side letters and any operational correspondence that changes the duration of possession. Then compare those documents with the real conduct of the parties. If the goods stayed in place after expiry, if the parties kept renewing informally, or if the arrangement became open-ended, those facts may matter to the section 13 analysis.

This review is also useful in transactions. If you are buying a business or taking security over assets, goods in the target's possession may not be owned outright. The amendment does not answer every due diligence question, but it does tell you to pay close attention to leases, bailments, term structure and commencement date.

The key message is that this is a targeted amendment, not a full restatement of PPSA law. It changes the wording of section 13 in specific ways, including moving certain references from one year to 2 years and expressly including a lease for an indefinite term in paragraph 13(1)(d). It also applies only to leases or bailments entered into after 20 May 2017.

That means businesses should use this Act as a trigger for careful review, not as a shortcut. If your business gives another party possession of goods, receives goods for use, or is assessing a target business with goods in its possession, you should check the current principal Act and the actual contract structure before relying on assumptions.

In many cases, the biggest commercial risk is stale paperwork. Templates drafted around older wording can remain in circulation long after the law changes. A practical review of dates, terms, renewals and indefinite continuation rights is often the first step to reducing that risk.