Security of Payment gets you paid while the builder is still trading. But what happens when they go under owing you for $40,000 of materials? That is where the PPSR comes in. It is technical and the timing is strict — so treat this as orientation, not advice — but every tradie supplying materials on credit should know it exists.
What the PPSR is
The Personal Property Securities Register is a national register of security interests in "personal property" (basically everything that is not land), under the Personal Property Securities Act 2009. If you supply materials on credit with a right to repossess, or hire out plant, that is a "security interest." With a proper written security agreement — your terms of trade, a retention-of-title clause, or a hire agreement — plus a PPSR registration, you become a secured creditor. In an insolvency, secured creditors sit ahead of unsecured ones when the liquidator works out who gets what.
Retention of title and the PMSI super-priority
A retention-of-title (ROT, or "Romalpa") clause says "I keep ownership until you have paid me in full." Under the PPSA that is a security interest over the goods. A Purchase Money Security Interest (PMSI) — where you supplied the very goods — can, if registered correctly and on time, give you super-priority over even the bank's all-assets charge for those specific goods.
The catch: ROT without registration is false comfort. In an insolvency an unregistered interest is "unperfected" and can vest in the insolvent estate — you lose the goods to the liquidator anyway.
The timing — where it bites
Two strict windows:
- PMSI super-priority: register before, or within 15 business days of, the customer receiving the goods (inventory generally must be registered before they take possession).
- The safe zone for company customers: if you register more than 20 business days after the security agreement is made and the company enters administration or liquidation within 6 months, your security can be void against the administrator. Lawyers treat "within 20 business days of the agreement" as the safe zone.
Get the agreement, the details (correct customer/grantor, serial numbers, collateral class) and the timing right — miss any one and the registration can be defective.
When it is worth it
- Supplying high-value materials on account — custom windows, stone, joinery, steel, big tile orders.
- Hiring out plant — excavators, scissor lifts, generators; a hire can be a security interest, and registration protects you if the hirer collapses.
- Routinely giving significant trade credit to thin-balance-sheet builders.
It is overkill for small paid-on-delivery jobs (a $200 drop of plasterboard). Many regular suppliers make a single "all present and after-acquired property" registration per customer and renew it periodically. PPSR fees are low (charged by duration); the real cost is the admin of getting it right.
PPSR vs Security of Payment
They do different jobs and you often want both:
- SOP is a fast payment claim and adjudication for progress payments while the builder is still trading — a procedural pressure point, not a property right.
- PPSR is a property right in specific goods that still matters after the builder collapses.
If a builder goes insolvent mid-SOP, your adjudication just makes you a creditor for that amount — unsecured without a PPSR registration. With ROT plus an on-time PMSI, you may reclaim the goods or be paid from their proceeds ahead of others.
The $40k example
A sole-trader chippy supplies $40,000 of custom joinery to a builder on 30-day terms; the builder collapses 10 days later:
- No ROT, no PPSR → unsecured; you share the scraps with everyone else.
- ROT but no PPSR → unperfected; the interest likely vests in the estate — you still lose the joinery.
- ROT + an on-time PMSI registration → secured with super-priority; you can reclaim the joinery or be paid from its proceeds ahead of others.
This one needs a lawyer
PPSR and insolvency are genuinely technical and timing-driven. This is orientation only — if you are regularly exposed (high-value materials, plant hire, big trade credit), get tailored advice on your terms of trade and set up a registration routine.
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