Commercial and Industrial Leases

If you are a landlord of commercial or industrial 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 tenant.

This can apply to assets such as furniture, fit out, machines and other plant and equipment which might otherwise be the property of the landlord under the terms of the lease. Such problems can be avoided by timely registration of the lease on the Personal Property Securities Register (PPSR).

This is unless the lease is registered on the PPSR. Registration is a cost-effective online process, well worth your time to protect your assets.