At the end of July, the PPSR had a go at streamlining their ‘Amendment Demand’ approach “to help simplify the strict legal process required when disputing a PPSR registration”. It is perhaps timely then, to briefly run over the steps that need to be taken when:
- A registration has served its purpose and no longer secures any obligation; or
- The registration that was lodged does not match any security interest you granted.
There is a lot of emphasis placed, quite rightly, on lodging registrations promptly, but far less on removing them once they are no longer required. Registrations will often sit on the register for years, long after a one-off piece of business has been concluded. Perhaps the Secured Party has simply overlooked their obligation to discharge it or holds out some hope that future business might arise. It is also possible that the Secured Party’s registration processes are sufficiently separate from their credit application processing that they didn’t pick up that you declined to accept their, otherwise standard, right to an all-embracing charging clause against your business and they just went ahead and registered it regardless?
“There is a lot of emphasis placed, quite rightly, on lodging registrations promptly, but far less on removing them once they are no longer required.”
Whatever the reason, while many ‘zombie’ registrations may be quite harmless, there is a distinct possibility that their presence could end up interfering with your access to future finance or become an obstacle to the sale of part of your business, so it is better to regularly review what has been lodged against you than wait until they become an issue.
The first step is simply to contact the Secured Party, explain that you don’t think their registration is serving any purpose, and ask them to remove it. The PPSR has some sensible tips for making this approach here, although the bottom-line is to be firm but reasonable – unnecessarily angry and threatening demands may be counterproductive. It is important that you make your approach to the correct contact and address identified in the Address for Service listed on the disputed registration and to quote both the registration number and any Giving of Notice Identifier (GONI) present on the registration.
The Secured Party needs to be given at least 5 business days to respond to your approach and, failing receipt of a satisfactory response within that timescale, you can use the PPSR’s new Amendment Statement form to ask the PPSR to remove or amend the registration for you. The relevant PPSR form can be found here.
Note, that if the validity of the registration in question is being disputed, the PPSR will not take any action to remove the registration until that dispute is resolved, either amicably between the parties concerned or by the matter being decided in the courts.