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PPSA – Make Receivers or Liquidators pay for your materials!
If you are a Head Contractor or Subcontractor not only do you build but you also supply materials. The law has changed with respect to the materials you deliver to site. The Personal Property Security Act 2009 Cth (PPSA) now determines who owns the materials. This includes all construction materials, ranging from a pallet of bricks to an expensive commercial oven, as long as it has not yet been installed.
The fundamentals:
- If you supply materials to site under retention of title terms the PPSA views the person who received the materials as the owner and you as the holder of a ‘security interest’ so, if you are not careful, you can lose out.
- In order to protect your right to be paid for or to take back the materials, you must register the interest on the Personal Property Security Register. If you do not register and the customer goes into receivership or liquidation you will lose your rights over the materials.
- If your customer goes into receivership or liquidation and you have registered your interest you should write to the receiver or liquidator clearly stating which materials you claim. Do this as soon as possible! If you receive any correspondence from the receiver you must reply or miss out!
So, what should I do?
- REGISTER!!! At the start of the job you can register ONCE for all materials and goods to be supplied. Try to identify the materials generally but perhaps include the site address in case there are a few sites. You will probably be registering as a PMSI.
- Make sure you keep (or put in) the retention of title clause in the contract. You will need this to PROVE you actually have the security interest you have registered!
For more information on the PPSA or for assistance with any construction law issue please feel free to contact us.
The fundamentals:
- If you supply materials to site under retention of title terms the PPSA views the person who received the materials as the owner and you as the holder of a ‘security interest’ so, if you are not careful, you can lose out.
- In order to protect your right to be paid for or to take back the materials, you must register the interest on the Personal Property Security Register. If you do not register and the customer goes into receivership or liquidation you will lose your rights over the materials.
- If your customer goes into receivership or liquidation and you have registered your interest you should write to the receiver or liquidator clearly stating which materials you claim. Do this as soon as possible! If you receive any correspondence from the receiver you must reply or miss out!
So, what should I do?
- REGISTER!!! At the start of the job you can register ONCE for all materials and goods to be supplied. Try to identify the materials generally but perhaps include the site address in case there are a few sites. You will probably be registering as a PMSI.
- Make sure you keep (or put in) the retention of title clause in the contract. You will need this to PROVE you actually have the security interest you have registered!
For more information on the PPSA or for assistance with any construction law issue please feel free to contact us.
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