If you’re a landlord of commercial property and your lessee goes bankrupt, or into liquidation, without the right protections, some of your assets could end up being used to pay their creditors.
Under the Personal Property Securities Act (PPSA), if an entity becomes bankrupt or goes into liquidation or voluntary administration, then an asset which is only held by that entity as a lessee, may be deemed to be an asset of the insolvent entity.
Most often this applies to assets such as furniture, fitout, machines and other plant and equipment which are not considered as "fixtures" under the terms of the lease.
This is unless the lease is registered on the Personal Property Securities Register (or PPSR).
You can protect your assets by registering them on the Personal Property Securities Register (PPAR). Registration is a cost effective online process, well worth your time to protect your assets.
If you require assistance with this or you have questions about any other aspect of commercial leasing or the PPSA, then please don’t hesitate to call Maroochydore based solicitors, Argon Law.