Equipment Rental including Lease, Hire & Bailment (PPSA)

The PPSA has changed forever the idea of ‘ownership’.  It’s now all about ‘possession’ and now, if someone in possession of your equipment becomes insolvent you can lose your equipment.  Possession is now, more than ever, “9/10ths of the law”.

Remember, the PPSA is all about security; if you have security you better register it on the PPS Register if you ever want to use it on the insolvency of your customer.

But what’s the PPSA got to do with the equipment you hire/rent/lease or lend to your customers?  You own the equipment so what’s the issue?

Well, in some situations, the PPSA deems you have a ‘security interest’ in your equipment, so, are you registering it?  And if not, what happens on the insolvency of a customer when they are in possession of your equipment?

You have to see this in action to truly understand it.

  • Ozzie Forklifts hires a forklift to its customer, Rogue Transport.
  • The hire meets the definition of a ‘PPS Lease’.
  • Ozzie is now deemed to have a security interest in its forklift.
  • The PPSA requires all security interests to be registered on the PPS Register.
  • Ozzie hasn’t bothered to comply with the PPSA.
  • Rogue Transport collapses.
  • Because Ozzie hasn’t registered its security interest on the PPS Register it losses its security AND it loses its equipment. The forklift simply becomes the property of Rogue Transport.

 Sounds incredible but hundreds of millions of dollars of equipment has been lost since the introduction of the PPSA and continues to be lost because equipment owners are failing to comply with the PPSA and register their security in their own equipment.

The answer is simple, comply with the PPSA and register your security.

Simply, if Ozzie Forklifts had registered its security in the forklift it would not have lost it on Rogue Transport’s collapse.  One, $6 registration against Rogue would have protected Ozzie for 7 years of ongoing hires between them.

So, when is your hire/lease or bailment a PPS Lease?  This area of the law has been amended several times and is NOT as clear as many would have you believe.

Generally, a lease/hire or bailment of equipment for a term of less than 2 years MAY not be a PPS Lease and accordingly, the PPSA won’t apply.

But (and there’s always a ‘but’) it’s not this simple and there are traps for the unwary.  For example, if you provide equipment to a business who will on-hire or cross-hire your equipment you can be exposed.  Or, if your agreement allows for the ‘rolling’ of the hire term, you may be exposed.  But why take the chance, your equipment is too valuable to risk for such a low compliance cost.

Our Introductory Services will review your business operations, your trading terms and we will advise whether the PPSA will apply to your equipment rental/hire or bailment.


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Be prepared for an uncertain economy

We’ve seen it many times before – when the economy nosedives, many businesses follow. Protect your business from the insolvency of others.

Long-term security

Trying to recover your debt and/or equipment after your client becomes insolvent is too late. Tighten your security to protect future payments and/or hired equipment.

Complicated paperwork done for you

Don't stumble at the final hurdle. We handle all the crucial paperwork to ensure you are correctly registered and your assets protected.

PPSAdvisory advises against several proposed revisions to the PPSA legislation due to potential increased costs, complexity, and uncertainty for businesses.


On Friday 17 November 2023, PPSAdvisory submitted a detailed response to the proposed amendments in the Personal Property Securities (PPS) framework. They challenge a number of the 345 proposed amendments made in the government’s response to the 2014 Whittaker report.


After almost 12 years of implementing the register, PPSAdvisory is concerned that these revisions will burden businesses with additional costs, complexity, and uncertainty instead of providing tangible benefits.


Users of the PPSA have adjusted their policies and registration practices to comply with the current legislation. Implementing such significant changes as proposed would require a complete overhaul of policies and practices. Additionally, these proposed amendments would render the policies and practices of many Australian businesses and financiers, particularly those involved in equipment hire, unworkable.


As result, the availability of finance for mining, construction, and heavy earthmoving equipment would be directly impacted. If financiers are unable to register their security interest in specific items of equipment (as only equipment with a Vehicle Identification Number can be registered by serial number), obtaining finance for such equipment will

become even more challenging.


We now await the response from Government to the submissions which have been made.


Feel free to reach out to us via the ‘contact us’ page on the website if you’d like any further information.