Priorities and registration

When taking security, a lender will be concerned to ensure that the security is effective against unsecured creditors, liquidators or trustees in bankruptcy or other secured creditors with a security interest in the same asset. This usually is achieved by taking possession, taking control (in the case of marketable securities and some other forms of personal property) or, and more commonly, registering the security (where registration is available) on the Personal Property Securities Register.

The priority rules for competing personal property security interests are contained in Pt 2.6 of the PPSA. If a competing security is a transitional security interest (as defined in the PPSA), ss 320 to 324 of the PPSA will also be relevant.

If the security is a mortgage over land, priority will be in the order of registration. If a security is not registrable, the general priority rule is that the first in time prevails.

See Priorities and registration.