About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Thursday, October 23rd, 4:14PM
rss
Latest Headlines

The Personal Property Securities Act 1999: Ready, Set, File!

The long-awaited Personal Property Securites Act, which comes into force later this year, will radically change existing practices. Good Returns explains what the act is all about.

Monday, March 19th 2001, 12:18AM

A Personal Property Securities Act was first drafted by the New Zealand Law Commission more than 10 years ago.

This long awaited piece of legislation, which is going to radically change existing practices relating to charges over personal property, is due to come into force later this year.

The original draft closely followed the equivalent Canadian legislation but has been substantially remodelled by the Ministry of Commerce to arrive at its current form. These changes have introduced many inconsistencies and anomalies which could reduce the precedent value of 25 years of Canadian case law and see the New Zealand courts tied up interpreting this far reaching legislation.

Certainly the act, which will create one centralised, electronic register to replace all existing registers covering personal property (including the motor vehicle securities register, the company charges registers and the registers under the Chattels Transfer Act) can be seen as a welcome overhaul of existing rules and systems.

However the raft of new concepts and terminology the act introduces may take some time for business professionals and advisers to come to grips with.

Definitions

Personal property is divided into a number of classes but is basically all property except for land. New terms introduced include "chattel paper" which covers hire purchase agreements and "investment securities" which covers shares, options etc. Personal property also includes intangibles and "present and after acquired personal property". Securities such as the floating charge are thus made redundant under this legislation.

The term "security interest" is fundamental to the Act and is defined in s.17 as:

"an interest in personal property created or provided for by a transaction that in substance secures payment or performance of an obligation, without regard to:

i) the form of the transaction; and

ii) the identity of the person who has title to the collateral."

The definition goes on to capture other transactions that are deemed to be security interests, including leases for a term of more than one year.

Attachment and perfection. Not the path to true love, but two more concepts fundamental to understanding the functioning of the new act. A security interest must attach to collateral to be enforceable.

There are wider requirements where third party rights are involved.

Perfection is achieved by registration of a financing statement. Perfection can not occur without attachment but registration of a financing statement can take place prior to executing a security agreement. It is the time of registration rather than perfection which determines the priority of the security interest.

Priority Rules

The general priority rule under the act is first to file wins. There are two main exceptions to this; ordinary course purchasers and a super priority to purchase money security interests (PMSI). To take advantage of the PMSI super priority suppliers will need a signed security agreement and must register a financing statement. This need only be done once for each customer but is likely to be overlooked by many suppliers who have till now relied on Romalpa type clauses on invoices. Under current practice Romalpa clauses, (or retention of title statements), generally gave the supplier priority over the holder of a security interest in the property.

The Register

A six month phase-in period is promised for secured parties to reregister existing securities on the new register. Large financing organisations are likely to need all of that as information required may be more detailed than they currently hold. For an individual, date of birth is required as well as name and address. For an organisation, incorporation number is needed. There are also several fields for describing the collateral depending on the type of personal property involved.

The maximum period of registration under the PPSA is five years. Renewals must be made before the original registration expires to maintain priority position.

The Registrar is required to send a verification statement to the registering party following the registration of a financing statement or financing change statement.

If all this has got you worried, the Ministry of Economic Development, (MED), which is responsible for implementing the act is staging a series of regional seminars over the next three weeks to assist organisations to prepare. You can get more information from its website at www.ppsr.govt.nz.

« Tying in your will with your family trustMemorandum of Wishes »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Commission questions to be asked
    “I feel that all risk commission/bonuses payable should be disclosed in dollar terms, and in the event of replacement business...”
    2 days ago by macca
  • Commission questions to be asked
    “The commissions in Australia on personal risk insurance are around 115% of initial premium- already well below NZ levels....”
    2 days ago by Mike Naylor
  • Commission questions to be asked
    “Like most things that are considered, the consumer reaction is unlikely to be taken into account. It’s less about fees...”
    2 days ago by Pragmatic
  • FAA review 'starting with a blank slate'
    “It is quite critical that legislators etc have some knowledge of investment theory before they legislate. For example Mr...”
    4 days ago by Brent Sheather
  • Don't discount small caps: Gaynor
    “Brian is quite correct. Also PIE funds is, and remains, a brilliantly successful manager. Massive return from a specialty. If...”
    7 days ago by NormanStacey
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AMP Home Loans 7.24 ▼5.69 6.39 6.65
AMP Home Loans $200k+ 7.14 ▼5.59 6.29 6.55
AMP Home Loans LVR <80% - - ▲5.99 ▼6.19
ANZ 6.74 6.15 ▼6.39 6.49
ANZ Special - ▼5.69 ▼5.75 6.09
ASB Bank 6.75 6.09 6.40 6.65
ASB Bank Special - 5.70 ▼5.75 6.19
BankDirect 6.75 6.09 6.99 6.65
BankDirect Special - 5.70 ▼5.75 6.19
BNZ - Classic - - 5.75 6.19
BNZ - GlobalPlus 6.74 5.89 6.39 6.59
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.15 - - -
BNZ - Rapid Repay 6.74 - - -
BNZ - Std, FlyBuys 6.74 5.89 6.39 6.59
BNZ - TotalMoney 6.74 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 6.05 6.20 -
Credit Union North 6.45 - - -
Credit Union South 5.75 - - -
eMortgage 6.04 6.15 6.69 7.19
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 6.45 - - -
Lender Flt 1yr 2yr 3yr
General Finance 5.95 6.25 6.50 7.10
HBS Bank 6.65 5.85 5.99 6.19
HBS Special - - - 5.89
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 6.70 6.00 6.50 -
Housing NZ Corp 6.74 5.99 6.39 6.59
HSBC Premier 6.84 5.95 5.95 6.39
HSBC Premier LVR > 80% - 5.75 5.75 5.75
HSBC Special - - - -
ICBC 6.75 5.99 6.39 -
Kiwibank 6.65 5.79 6.39 6.65
Lender Flt 1yr 2yr 3yr
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 6.55 - - -
Kiwibank LVR > 80% - - 5.89 6.19
Liberty - - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society 6.95 6.15 6.60 -
NZ Home Loans 6.85 6.09 6.40 6.65
Perpetual Trust 7.70 - - -
Resimac 6.59 6.35 6.58 6.77
SBS Bank 6.65 5.85 5.99 6.19
SBS Bank Special - - - 5.89
Lender Flt 1yr 2yr 3yr
Silver Fern 5.95 6.10 6.55 7.05
Sovereign 6.85 6.09 6.40 6.65
Sovereign Special - 5.70 5.75 6.19
The Co-operative Bank 6.70 ▼5.70 ▼5.89 6.19
TSB Bank 6.74 5.95 6.19 6.30
TSB Special - - 5.79 -
Wairarapa Building Society 6.20 5.75 5.95 -
Westpac 6.59 6.09 6.39 6.65
Westpac - Capped rates - 6.74 6.99 -
Westpac - Offset 6.59 - - -
Westpac Special - - ▼5.75 6.19
Median 6.70 6.00 6.39 6.52

Last updated: 22 October 2014 7:07am

News Quiz

In a study of performance fees by Pathfinder, how many of the 10 equity PIE funds reviewed have to achieve a margin over and above their benchmark before performance fees kick in?

10

9

7

5

2

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by PHP Developer and eyelovedesign.com