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This article is focused on New Zealand law and explains issues from a Common law perspective.
How to check the NZ Personal Property Securities Register for money owed on property offered to you for sale
The New Zealand Personal Property Securities Register (PPSR) is an official Internet-based register that you can use to check whether someone such as a finance company has a legal interest in something that you are considering buying, such as a car.
The seller may have bought the property on hire purchase, or borrowed money from a finance company using the property as security for the loan. If the seller stills owes money, you will be able to check for this on the PPSR.
If you find they do owe money, don't buy the item. This is because a creditor who has registered its interest on the PPSR has a legal interest in the property that will (with some exceptions) take priority over your own rights in the property. This means that they can take possession of the property and sell it to recover the debt owed.
The Register is established under the PERSONAL PROPERTY SECURITIES ACT 1999. It is run by the Business and Registries Branch of the Ministry of Economic Development.
What's new and different about the PPSR?
The PPSR began operating on 1 May 2002. There have always been official registers for security interests in personal property, and it's always been desirable for potential buyers to check these registers to find out whether money is owed on the property. But the PPSR is a modern, centralised, electronic register, and is easier for the general public to understand and to access.
The PPSR replaces several different registers that emerged at different times historically and in an uncoordinated way. It was difficult for the ordinary public to know which register they had to check, because this depended on what kind of property it was and on whether the debtor was a company or an individual. It was also often difficult to get access to the register even once you knew which one to check, because it might be a register in a High Court office in a different part of the country.
So if the property was a car and the owner was an individual, the security interest was registered on the separate Motor Vehicle Securities Register. But if the owner was a company, the interest would be registered on the Companies Charges register held at one of the five regional Companies Offices. If it was some other kind of property â€“ say, a boat â€“ then the interest would be registered on the Chattels Register at the High Court if the debtor was an individual, but on the Companies Charges register if the debtor was a company.
By contrast, the Personal Property Securities Register brings all security interests onto a single national register. It also covers some security interests â€“ like hire-purchase agreements - that didn't have to be registered under the old system in order to protect the creditor.
When am I protected against a registered security interest?
The general rule is that if creditors has a registered security interest, their rights in the property are superior to someone who buys the property from the debtor.
But there are some important exceptions to this that protect ordinary consumers. When those exceptions apply, a person who buys property subject to a registered security interest get full rights in the property. This means that the creditor is not able to force a sale of the property to recover the debt, and must instead pursue other legal remedies against the debtor.
You'll get full ownership despite any registered security interest in the following cases.
- Buying from dealers
- - You'll get full ownership if you buy from a dealer, as opposed to a private sale.
- Consumer goods under $2,000
- - You will be protected if you bought goods that are normally bought for personal or household use, and that were worth less than $2,000 when the security was taken out.
Note that this $2,000 limit usually applies to the price that the seller paid for the goods, not the price you paid the seller for the goods. If you paid $1,500 for the goods, but they were worth $2,500 when the seller bought them or took out the loan secured by them, you won't come under this exception; therefore the creditor's interest in the property will take priority over yours.
- Buying from registered car dealers
- - You will be protected if you buy a car from a motor vehicle trader who is registered with the Ministry of Economic Development.
In other words, you won't be protected from a registered security interest when you:
- buy non-consumer goods (say, a printing press) in a private sale, or
- buy consumer goods (say, a home computer) in a private sale, if the goods were worth more than $2,000 when the seller originally bought them or used them to take out a loan
So how do I check the PPSR?
You can either check the official register yourself, for a small fee, or you can pay for a private agency to check the register for you.
Checking the register yourself
The PPSR can be checked on-line at www.ppsr.govt.nz, 24 hours a day, seven days a week. You can check it from your own computer if you have access to the Internet. It's also expected that the public will be able to access it from computers available in places such as Courts, Government departments and libraries.
You can search for a security interest either by the name of the person selling you the property (that is, the person who would owe the debt to the interest-holder), or by details of the property itself, such as a car's registration or chassis number.
It costs $1 to search each time. You can pay this on-line using a credit card. Alternatively you can set up an account and be billed later. It won't cost anything to set up the account.
Are there private agencies that will search for security interests for me?
In some cases it may be easier and more convenient for you to pay for a private agency to search for registered security interests for you. Perhaps you don't have and can't get a credit card, or you don't think it's worth starting an account for the PPSR if you're unlikely to be using it again for a long time.
A private agency that is often used to check for registered security interests in motor vehicles is "Autocheck", which is listed in the phonebook. It covers cars, trucks, motorcycles, tractors, trailers and other vehicles. You'll need to give the registration and chassis numbers on the vehicle; make sure you give the ones imprinted on the vehicle itself, not the ones given on the ownership papers. If Autocheck tells you the vehicle has no registered security interest you'll be safe to buy until 9.00 am the next day. If you intend to buy it after that time, you should check with Autocheck again to make sure no security has been registered in the meantime.
It seems that there's currently no private phone service that provides easy and convenient checking of registered interests in property other than vehicles. You will probably be able to find legal search agents who can check for you if you look in the Yellow Pages under "Legal Agents". But it's likely to be cheaper for you to learn how to check the PPSR yourself in these cases.
- Checking the Personal Property Securities Register will not tell you whether the property you're considering buying has been stolen. If you suspect it has been stolen, you'll need to check with the Police.
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