PPSR - Personal Property Securities Register: Transitional or Non-Transitional

When the PPSR was introduced on 30/01/2012 the legislation effectively stated that any new security/credit agreements you entered into after that date would only be fully effective if they were promptly registered on the PPSR and that their effective date would be deemed to be the date of that registration.

However, where you already had an existing security/credit agreement in place before that 30/01/2012 start date, the PPSA’s transitional rules would deem any security interests arising from that agreement to have been rendered fully effective (without the need for registration) for a period of up to 2 years. To be effective for more than 2 years, registration would be required.

During that 2 year period these pre-existing security agreements would be deemed to have an effective start date of just before the PPSR’s 30/01/2012 commencement date. Any of these transitional agreements that were registered on the PPSR during the 2 year period between 30/01/2012 and 31/01/2014 would also be allowed to ‘count’ their effective date back to before the start of the PPSR rather than the date of the registration itself.

Now that the 2 year window for keeping the pre-30/01/2012 ‘count-back’ has closed, all registrations being lodged on the PPSR have an effective date aligned to the date of registration.

The only real difference now between designating a registration as a transitional as opposed to a non-transitional security interest is that the PPSR does not levy a charge ($8.00) for registering transitional security interests.

UPDATE: The PPSR now charges exactly the same for lodging a Transitional registration as it does for a non-transitional registration.

Over the past 2 years or so we have seen many instances of insolvency practitioners attempting to invalidate or otherwise discredit security interests on the basis that they had been designated as transitional rather than non-transitional. I have never come across an instance where the reverse has been the case.

If the agreement signed between you and your customer is dated after 30/01/2012 then you should register as non-transitional.
If your applicable terms and conditions have been amended since 30/01/2012 you should register as non-transitional.
If you can’t find a copy of your agreement with your customer then you should look to get a fresh one signed and register as non-transitional.
If your signed agreement doesn't incorporate your security agreement and your retention of title clause only appears on your invoice then you should register as non-transitional.
If you're in doubt register as non-transitional.