Are you buying an asset, a vehicle or anything else of value? Be sure to check the PPSR

We recently acted for a purchaser of business assets.  As part of our routine checks we carried out a search of the Personal Property Securities Register (PPSR) and discovered that one of the items had a security interest registered against it. After further enquiry it turned out there was nearly $10,000 owing on the asset. This had not been disclosed by the seller.  With this knowledge our client could arrange for the debt to be paid in full and for discharge of the security interest before going ahead with their purchase. It may have been a very different outcome if they didn’t know about the debt prior to their purchase.

A security interest may be enforced against third parties, even an unsuspecting purchaser of the collateral.  The last thing that you want to happen is for your new property or vehicle to be repossessed because the person that sold to you has defaulted on their payment obligations.  You can reduce your risk by checking the PPSR before you buy.  A PPSR search costs just $2 +GST.  To register and search on the PPSR, you must first create a login and set up an online services account. See www.ppsr.govt.nz.  

If you are looking to buy something of value and you would like our assistance to search the PPSR or with the purchase in general, please get in touch for an initial free, no obligation chat. www.rachelwebster.co.nz/contact

A few key terms to help better understand the PPSR:

PPSR - the online noticeboard where legal claims to personal property (security interests) can be registered

security interest – the right to personal property established by a security agreement, also known as a ‘financial interest’ or just an ‘interest’

security agreement – agreement signed when an offer of credit is made e.g. granting of a loan or a hire purchase arrangement

secured party – the person or organisation that registers a financing statement

financing statement – relevant information collected and recorded as an interest on the PPSR e.g. collateral details, the debtor and the creditor

collateral – personal property used to secure a debt, almost anything of value can be used as collateral with some exceptions such as land, buildings and large ships.