Your gear, on their site, in their liquidation.
PPSR registration for equipment hire businesses
If you rent out coffee machines, fridges, POS terminals, copiers, forklifts, site sheds or gym equipment on agreements with no fixed end, every unit out on hire is a PPS lease. The law says you have to register each one on the PPSR, and if you haven't, your customer's financier or liquidator can take the goods you still own.
- 2 years
- or any open-ended term makes a hire a PPS lease
- 15
- business days after delivery to register for priority
- $6
- government fee for a 7-year registration
The indefinite-term trap
A hire that runs 'until returned' is a PPS lease from day one, even if the customer has only had the machine a month. Most small rental businesses write their agreements exactly this way.
The bank's charge
Your customer's bank almost certainly holds a registered all-assets charge. Unregistered, your equipment on their premises is covered by it. Registered in time as a PMSI, your claim comes first.
Vesting on insolvency
Under section 267 of the PPSA an unregistered interest vests in the hirer when an administrator or liquidator is appointed. GE lost turbines worth tens of millions this way; QES lost three excavators the same way.
What has to be in your hire agreement
Registration only works if the agreement supports it. Yours should say the equipment stays your property, that the agreement is a security agreement and (where it is one) a PPS lease, that you may register on the PPSR including by serial number, that the customer waives the verification statement notice, and that the customer will tell you before changing its name, ABN or the site. OnTerms gives you a clause in that form to put in front of a lawyer.
How each unit is registered
- Vehicles and plant with a VIN or chassis number (trucks, utes, most forklifts, ride-on plant): by serial number, so a buyer's $2 search finds you, and by grantor
- Everything else (coffee machines, fridges, copiers, scaffolding, site sheds): as Other goods against the hirer's ACN or ABN, with make, model and serial in the description
- Flagged as a purchase money security interest, with proceeds ticked
- Seven-year duration with a renewal alert, or the term of the hire if longer
When
Within 15 business days of delivery for PMSI priority, and within 20 business days of signing if the hirer is a company. For a fleet already out on hire, register everything now; those registrations rank from today, which is still a great deal better than nothing.
What OnTerms does
- You upload your hire agreement and a list of units out on hire (customer, site, serial, delivery date).
- We check the customer's identity on ABN Lookup and ASIC and show you what we'll lodge, with the clause reference from your agreement.
- You confirm. We lodge each registration under a secured party group in your name, with our address for service so nothing gets missed.
- We send you the verification statements, watch the expiry dates, and tell you the day one of your customers appears in an insolvency notice.
Common questions
Our hires are all under 12 months. Do we need this?
Fixed hires under two years aren't PPS leases, so the deemed interest doesn't arise. A security clause plus a $6 registration still protects you against the hirer's financier, and many hire businesses do it for anything valuable.
We have 300 units out. What does that cost?
$49 a unit on Protect, or the Growth plan at $99 a month which includes 50 registrations a month plus renewals and insolvency alerts. Government fees are $6 a registration either way.
A customer just went into administration. Is it too late?
If the unit wasn't registered before the appointment, yes for that customer: the interest has vested. Run the free check to confirm, then register every other customer this week.