The Personal Property Securities Act 1999 (“PPSA”) sets out rules for determining:
how to take a security interest over personal property;
when a security interest is valid and enforceable against the debtor, other secured parties, a receiver or liquidator, and a purchaser of the property; and
which secured party will have priority to seize and sell, or to receive sale proceeds, when the security needs to be realised.
The documents allow secured parties to:
change the priority rankings of their security interests (i.e. from first to second, and vice versa); and
limit each other’s priority to agreed maximum priority amounts.
Each of the documents is split into two parts.
The first part is in a Word document format which you can download, type in details specific to the particular transaction, and then arrange to sign with the other parties.
The second part sets out the general terms and conditions that apply to the first part. It must not be changed without consulting the member bank involved in the transaction and is in a secure pdf format. The first part references and incorporates the second part of the document. You can print off the second part, and attach it to the Deed or Letter, or leave the cross reference to where it appears on the Association’s website.
The Letters of Priority are less formal than the Deeds, and the Debtor is not required to sign them. You will need to confirm with all the parties whether the Deed or the Letter is to be used for a particular transaction.
Deeds of Priority have also been prepared which regulate the priority of three secured parties with interests in the same property.