It is a difficult time for the construction industry. Material price costs have caused the collapse of builders and left subcontractors out of pocket.

The Australian Government’s Personal Property Securities Register (PPSR) is one way to help you get your invoices paid, or your goods back, if your customer can’t pay.

For the construction industry, PPSR protection is important when leaving leased goods on site or when supplying goods on credit for installation. The register can provide risk protection if the principal contractor or site owner goes bust.

By adding your information to the PPSR, you’re declaring your interest in the goods you have supplied. This can mean you’ll have a legal right to be first in line to be paid or to get your goods back.
It costs $6 to make a registration that can protect your business for up to seven years.

Protecting goods left on-site

Depending on the terms of the contract, goods left on worksites that have interests should be protected through registration.

This includes:

• protecting the contractor’s interest in temporary works (eg scaffolding) to be removed at the end of the contract;
• the principal’s interest in goods paid for fully or partially by the principal but which are in the possession of the contractor;
• ‘step in’ or ‘take out’ rights for the principal to use goods on-site to finish the contract in case of contractor default.

Retained money

Construction contracts commonly provide that monies owing by either party may be retained by the other party pending stage completion or events.

The retaining party should consider the registration of their interest in the monies as an ‘account’.

Useful guides

More information about making a registration is available in this guide: Trying to get your invoices paid?

These guides provide information about how to enforce existing security interests, depending on your customer’s circumstances:

• Your customer has gone broke and an insolvency practitioner has been appointed — what happens now?
• Your customer has defaulted on your security agreement – what happens now?

MEA continues to advocate to State and Federal Governments for improved protections for subcontractors. We have been calling for the 2018 Murray Review’s Security of Payment recommendations to be implemented including Deemed Statutory Trusts and Project Bank Accounts.