Of course, as a property lawyer, I’m fascinated when anything property-related crosses my path. The Federal Government has announced a proposal to draw all the personal property security registration regimes into one national Register. It has released a Draft Personal Property Securities Bill for consideration by interested members of the public and companies. All kinds of personal property are proposed to be covered, including tangible and intangible property.
For the non-lawyers out there who are wondering what a personal property security is, think about those ads where companies offer you an “interest free loan for three years” so you can buy a car/bed/fridge or whatever. If you default on your loan, the lender has a security interest over the property which enables it to seize and sell off the property to meet your debt. There are other kinds of security interests as well, but that’s the basic concept.
As far as I can see, the new Register is intended to operate rather like the General Law Land register (as opposed to the Torrens System). That is to say, registration gives an interest holder priority over any unregistered interest holder (regardless of when the interests were created in time) but a failure to register will not render the security interest unenforceable.
It is proposed that the Register be able to be searched so that security interests over personal property can be easily discovered. So if you buy a second-hand car, you can check the Register to see whether the car is subject to a hire-purchase arrangement before you fork out the money. It sounds like a good idea to me, although I suspect that there will be a few privacy issues to be ironed out.
(Hat tip: The Wonkery)
3 Comments
This has potential, but could also become increasingly bureaucratic, too. The Torrens system benefits from the ’special status’ we give realty at common law, and although this isn’t a complete Torrens analogue, I do wonder at how transferable the basic ‘registration’ idea actually is.
Well various registries already exist — REVS for example.
The legal question really would be whether the REVS model is followed (registry follows claim of ownership) or full-blown Torrens (ownership follows claim in registry). The latter could cause all manner of mischief.
Yes, I thnk they’re right to do it in a general law land-ish fashion - this is also the mode of the various registries which already exist. I understand from the material surrounding the bill that there are in fact 77 separate State and Territory Acts governing chattel registers and the like…
SL, with registries, there’s always a fine balance between making it easier for all and sundry (desired outcome) and over-bureaucratising it (certainly not desired). I hope they get the balance right.