ByLawyers News and Updates

Leases – QLD

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By Lawyers Leases – QLD publication has been reviewed and updated to ensure that the commentary and precedents are in line with current law and practice.

Queensland property lawyers and conveyancers will find helpful enhancements resulting from this review, including:

Expanded commentary on: –

  • Agreements/offers to lease.
  • The application of the Retail Shop Leases Act 1994.
  • Personal property securities considerations when acting for a lessor or lessee.
  • Disclosure statements – for new leases, assignments and renewals.
  • Outgoings.
  • Rent review procedures.
  • Options to renew and the form of renewal.
  • Security for performance.

New commentary on –

  • The applicability of the Competition and Consumer Act 2010 (Cth).
  • A lessor’s disclosure obligations in relation to the leasing of land listed on the Contaminated Land Register.
  • The importance of correctly defining the premises to be leased.
  • Obtaining mortgagee consent to a lease.

New precedents including –

  • Lessee waiver notices pursuant to s 22B of the Retail Shop Leases Act 1994 – New lease and assignment.
  • Heads of agreement for offer to lease – Concise.

These enhancements to the Leases – QLD guide will assist lawyers acting for either a lessor or lessee.

This review is part of By Lawyers continuous commitment to reviewing and enhancing our publications to ensure our subscribers.

Personal Property Securities Act and leases

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Personal Property Securities Act and leases

All By Lawyers Lease Publications have been updated to include new commentary on the implications of the Personal Property Securities Act  2009 (PPSA) for landlords and tenants when entering into a new lease and on assignment. The Retainer instructions and To do list precedents have also been updated to ensure that these important considerations are not overlooked.

Leases often encompass personal property, such as fit-out owned by the landlord made available under the lease, or plant and equipment owned by the tenant left in the premises on abandonment.

In such situations, the PPSA can operate to deprive the true owner of their rights if not recorded on the Personal Property Securities Register (PPSR). For example, unless a landlord registers a security interest on the PPSR in relation to their personal property which is in the possession of a tenant, they may not be adequately protected against claims on the property by third parties including the tenant’s financier.

At the time of entering into a new lease or on assignment, a landlord should consider whether registration of a security interest is required in relation to any personal property. Consideration should also be given to the inclusion of a PPSA clause in the lease to allow the landlord to enforce security interests in personal property. Any such clause must be reasonable, should be confined only to the relevant personal property concerning the lease and should not affect the tenant’s ability to obtain finance or provide security to their financier.

For further information on Personal Property Securities Act and leases , see the By Lawyers Lease publications and the By Lawyers dedicated Personal Property Securities publication.

Personal Property Securities

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Personal Property Securities

NOVEMBER 
  • The commentary has been updated to discuss transitional security interests and migrated security interests as the transitional period for migrated registrations ends 31 January 2017.
  • Costs Agreements – Reference to interstate costs laws added and updated interest clause
OCTOBER 
  • Costs Agreements
    • Disputes section improved, fields for client and firm details added, trust account details added, solicitor’s lien added, execution clauses for individuals and corporations added and general formatting and grammatical improvements.
    • VIC/NSW -Included reference to time limit for bringing costs assessment, total estimate of legal costs section with provision for variables, and authority to receive money into trust.
    • WA – Added clause on scale fees.
AUGUST 
  • Costs Agreements have been added for Northern territory, and Tasmania.
APRIL 
  • File Cover Sheets for all publications have been completely re-formatted for a better look.
MARCH 
  • New commentary added on disputing a registration, covering both the administrative process under the Personal Properties Securities Act 2009 and the judicial process. Associated precedent Amendment Demand and Amendment Statement also added to the matter plan
FEBRUARY
  • This matter plan has been reviewed and reorganized with a view towards a more intuitive approach.
  • All federal publications now include a costs agreement for the ACT.
  • Making life a little easier for practitioners – look out for Blank Deed, Agreement and Execution Clauses folder in the matter plan at the end of each Getting the Matter Underway.

What you need to know about the the Personal Property Securities Act 2009

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By Lawyers

Many practitioners have expressed concerns as to how the new legislation will affect them, and expressed fears they will overlook actions they should take.

This is written to assist in quelling those fears.

What must a practitioner look out for?

Generally a practitioner will need to either search the registry to establish that personal property is not encumbered, or to register a security interest that has been documented to ensure the priority of that interest.

Registration and search will be the everyday actions that practitioners take to protect their client’s interests. Both are simple processes and in time will become second nature.

Security interests covered by the Personal Property Securities Act (PPSA) include:

  • charges;
  • mortgages and pledges;
  • conditional sale agreements;
  • sale of goods subject to retention of title;
  • hire purchase agreements;
  • consignments; and
  • leases of goods.

The central fact to remember is that the Act provides a method of establishing priority of competing interests in personal property. It does not affect the efficacy of agreements vis-a-vis the parties and it does not apply to real property.

Existing agreements and arrangements need not be recreated, however if required there are security agreement precedents provided in the Step-by-Step publication.

There is a two-year grace period to allow for the implementation of the new arrangements and registration of security interests.

However note security interests in goods supplied on retention of title basis will not necessarily have the benefit of the transitional grace period, so consideration should be given to registering them after commencement of the Act.

Existing charges registered with ASIC, and many other financial arrangements such as those recorded in registers of encumbered vehicles, will be automatically migrated to the PPS Register.

To assist practitioners to avoid any oversights we have included reminders or cues in the instructions checklists for sale of business, mortgage, lease, and sale and purchase of real estate.

The PPSA will not be of much relevance to conveyancers unless there is personal property included in the sale that sensibly might be subject to finance. A search of the registry to ensure it is unencumbered is easily made. This doesn’t mean searching for the usual fixtures or minor inclusions in residential sales, but rather something such as an expensive ride on mower.

On the other hand, when acting on the purchase of a business a search should be made to ensure that the goodwill, stock, plant and equipment are not encumbered.

Practitioners will clearly not be caught out when issues are specifically raised by clients – for instance, in relation to such matters as retention of title clauses in their terms of trade – as they will have time to research our commentary and other sources and to direct the client to the array of available information.

The main arrangements clients will need to reconsider are as follows:

  • Supply contracts that contain a retention of title clause may require registration as purchase money security interests to protect the interests of the seller.
  • Equipment leases or bailments of more than 12 months may require registration to protect the interests of the equipment owner.
  • Leases of more than 90 days duration of serial numbered goods may require registration to protect the owner’s interests.
  • Some charges in joint venture agreements may need to be reviewed.

The usual transactions that will trigger the need for action are when a client wishes to secure a debt on personal property or when a client is buying or lending on security of personal property.

Some examples
  1. Sale of business with money left in, secured on any part of the business such as stock, plant and equipment, goodwill and licences: a common situation.
  2. Sale of personalty with vendor finance: a common situation.
  3. Companies giving directors or shareholders charges over assets to secure loans: a common situation.
  4. Provision of goods subject to retention of title until paid: clients will need to review their terms of trade and decide whether they need to register and if so, whether they will register or simply take the risk with their regular customers.
  5. Lease of personalty: not often seen in small practices.
  6. Sale of real estate with fixtures or fittings that are subject to finance agreements that need to be discharged: unusual.

The Personal Property Securities Register has developed five interactive tutorials to assist practitioners:

  • Getting started;
  • Creating a registration;
  • Creating an account;
  • Searching the PPS Register; and
  • Creating a secured party group.

For further information about how the register works:

Email: enquiries@ppsr.gov.au
Phone: 1300 007 777 (1300 00PPSR)

Tip Box

Whilst written for Federal practitioners this article has interest and relevance for practitioners in all states.

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