I get asked a number of questions quite regularly regarding the PPSA concerning licence agreements, rentals and hire contracts. These are not caught under the PPSA. Neither are leases of land.
- Licences are out as they are not security interests ( s12(5)(b) ) – ( e.g. a mere licence to use which confers no proprietary interest)
- Hires and rentals (aka operating leases) of equipment are out provided they are for terms of less than 1 year or 90 days in the case of serial numbered goods (ie rentals/hires of goods greater than these timeframes will qualify as PPS leases.) Watch out for those rentals/hires that are renewable and capable of extension beyond the 1 year / 90 day period as they will become PPS Leases.
- Leases over land are specifically excluded ( s8(1)(f)(i & ii). But watch out for fixtures and fittings that have been funded as they may be subject to security agreements…
Adrian Hunter 