Personal Property Securities Register – Preferential Payment Claims Causing Headaches!
Recent publicity in Queensland has identified the ongoing risk that many contractors have if they have not registered their customers (even when they are major builders) on the Personal Property Securities Register.
If the customer is not registered, then the contractor has no protection against a claim from a liquidator of an alleged preferential payment and the customer runs the real risk of liquidators “clawing back” payments made to the contractor in the six months preceding the liquidator’s appointment.
Complaining that a government agency responsible for the licensing of builders has not been diligent in their activities will not protect the contractor against a liquidator’s claim for preferential payment.
I’ve just completed six workshops for the Federal government’s Entrepreneurs’ Program “Mentoring of Company Directors in Small/Medium Enterprises”. Less than 5% of the directors attending these workshops had heard of the Personal Property Securities Register and more worrying less than 1% claim that they’d ever been approached by their accountant relative to the risks that they were taking by not registering customers and other items on the PPSR.
Our recommendation is that you talk to your clients about the problems relating to the Personal Property Security Register and that you offer to undertake due diligence reviews to check on your clients’ systems relative to this legislation which can really destroy businesses if people have ignored it.