Buying used equipment can save a small business a lot of money. A used excavator, coffee machine or delivery van often costs far less than new. The risk is that the seller may still owe money on it. If they do, the lender could have a claim over the item even after you have paid.
The Personal Property Securities Register, known as the PPSR, is how you check for that risk before you hand over your money. It is a national register run by the Australian Government. This article explains what it shows, how a search works and how a business can register its own interests. It is general information for Australian buyers and sellers.
What the PPSR is
The PPSR describes itself as a single national online database that shows whether someone is claiming a security interest in goods or assets. It was set up under the Personal Property Securities Act 2009. The PPSR page on the PPS Act explains that the Australian Financial Security Authority administers the Act and the register. It does this through the Registrar of Personal Property Securities.
A security interest is a claim a lender, seller or lessor has over personal property, and a registration may mean money is owing on it. The PPSR lists equipment, machinery and stock among the valuable used goods worth checking. Cars are another common example. A lender who finances a truck, for example, may register an interest over that truck until the loan is repaid.
Why a search matters before you buy
The main risk is simple. The PPSR warns that if you buy goods with money owing against them, they could be repossessed even after you have paid for them. You would then be left chasing the seller for your money. That can be slow and may not succeed if the seller has no funds.
A search tells you whether an item is being used as security for a debt and who the debt is owed to. It does not tell you how much is owed. If a registration appears, you can ask the seller to arrange a payout and a release before settlement. You can also walk away from the deal.
Vehicles and other serial numbered goods
Some goods can be searched by serial number, such as motor vehicles and watercraft. For a vehicle, a search may also tell you if it is recorded as stolen or written off. That is useful information for any business buying a work vehicle from a private seller. Other goods are searched against the details of the person or organisation granting the security, called the grantor.
How a search works
The PPSR guidance on high value goods recommends a search before buying valuable goods privately. An online search costs $2. Results are available immediately and come with a search certificate. You can keep that certificate as proof of what the register showed at that time.
A grantor search for an individual needs their full name and date of birth. The name must be spelled exactly as it appears on their identification. The PPSR suggests this kind of search before buying goods worth more than $5,000 from a private seller. An assisted search by phone costs more than the online option. Either way, run the search as close to payment as you reasonably can.
You need an authorised purpose
The register is not open for idle curiosity. You may only search for an authorised purpose. Permitted purposes include checking whether property is subject to an existing security interest and deciding whether to provide credit. Having the person’s consent is also listed as a permitted purpose.
Buying from a business or a trust
Many sellers are companies, partnerships or trusts rather than individuals. The PPSR notes that partnerships and trusts with an ABN are registered against the ABN. Each partner may need to be searched separately as well, and a trust without an ABN may be registered against its trustee. It pays to work out exactly who owns the goods before you search.
Trust structures can make ownership less obvious. A trustee holds assets on behalf of the trust, and that trustee might be a person or a company. Our article on choosing an individual or corporate trustee explains how those structures work. Knowing which one you are dealing with helps you search against the right details.
Protecting your own business as a seller
Sellers can use the PPSR too. Businesses that sell on terms, such as retention of title or consignment, can register their interest. So can businesses that lease, rent or hire out goods for more than two years. A registration costs $6 and can last up to seven years.
The PPSR says registration can help a business claim items or their value back if a customer does not pay or becomes insolvent. Registering early also improves your priority over other creditors. If you supply goods on credit, it is worth reviewing your terms of trade with a lawyer. The way the security is described and registered can affect whether it holds up.
Fitting PPSR checks into your routine
A PPSR search is a small step that sits alongside the other checks a business makes. Owners already juggle tax, insurance and staff obligations every week. If you are hiring people to operate new equipment, our guide to super obligations as an employer covers one of those duties. Building a search into your purchasing process means it does not get forgotten in a busy week.
Staff who buy on behalf of the business should know the process too. A written purchasing policy can say that no used item over a set value is bought without a search certificate on file. Policies like this are part of good workplace practice. If questions arise about staff responsibilities, an employment lawyer can explain your options.
Keep each search certificate with the purchase records for that item. It shows what the register recorded on the day you searched. Clear written steps also mean someone else can finish a purchase safely if the owner is away. Good records make any later dispute easier to manage.
Frequently asked questions
Does a clear search guarantee the goods are safe?
A search certificate shows what the register recorded at the moment you searched. It is strong evidence that you checked properly. It is still sensible to confirm the seller owns the goods and to pay soon after searching.
What if the search shows a security interest?
The search will show who the debt is owed to, but not the amount. You can ask the seller to have the interest paid out and removed before you pay. If that cannot be arranged, think carefully before going ahead.
Do the rules differ between states?
The PPSR is a national register under Commonwealth law, so the same register is used across Australia. Related areas such as contract disputes and courts can still vary between states and territories. Fees and rules also change, so check the current position on the PPSR website.
This article is general information only and is not legal advice. Laws and processes differ between states and territories and change over time. Please speak with a qualified lawyer about your own situation.
