You don’t have to be a bank or a lending institution to lodge a mortgage over someone else’s property. It is possible to register a mortgage over property via a private loan agreement.
If you are considering lending or borrowing money from someone under a private arrangement, it is important that the transaction is documented appropriately in writing. Under certain agreements, security can be provided by way of a mortgage over the borrowing parties farm or property.
Our Agribusiness Team has extensive experience in dealing with private loan agreements and in particular, private loan agreements for farming and agricultural purposes. Whether you have loaned money or are lending money to another farmer, we can assist with preparing Loan Agreements as well as lodging and registering mortgages on certificates of title.
Registering an interest on the Personal Property Securities Register (PPSR) notifies other parties that you have a priority claim to that asset. A charge registered on the PPSR can be very useful when it comes to creditor issues or disputes of ownership over an asset. PPSR searches can also be used to determine any ownership issues before purchasing or entering an agreement for an asset. To ensure your security is able to be registered it is important that the security interest rights are recording in writing.
What can I register an interest in?
A wide variety of assets and interests can be registered on the PPSR, including items such as motor vehicles, stock in trade, or goods such as crops and grain, cattle and other livestock. It can be an important way of ensuring that there is no ambiguity of ownership and can be used in many circumstances.
How is this relevant to me?
Registering your interest in an asset or product notifies other parties of your credit interest and can provide you protection against harm to the asset in the future. Common uses for the PPSR in the agriculture practices include:
- Selling or buying livestock, wool or other assets;
- Leasing or hiring out of stud livestock; and
- Selling, leasing or purchasing machinery or equipment.
By registering your interest in the asset on the PPSR you notify other parties of your priority claim. A practical example may where you are looking to purchase livestock or a quantity of produce. A PPSR search would alert you to whether a third party has registered their interest in that asset first. If this is so and the arrangement falls through that third party would have a priority claim to the asset. Alternatively, if it is your asset you seek to protect, registering a claim on the PPSR can provide you with the security should something happen to the asset before the transaction is complete.
How can Coulter Roache help?
The PPSR can be a complex system to navigate but is a useful tool and one which is often overlooked in transactions. If you require assistance in registering an interest, searching for registered interest over a potential purchase or require other advice regarding the PPSR, the knowledgeable team at Coulter Roache can assist.
If you are considering entering into a contract with someone to sow and/or harvest a crop, you may wish to consider the terms of your agreement and whether or not you have right to exercise a lien over the crop.
What is a lien?
A lien is a form of security which gives the creditor (ie the party whom provides the service) a right to sell the crop in the instance that the owner of the crop does not pay for the creditors services.
This operates exactly the same as when a mechanic sells someone’s car to recover the cost of parts/labour in the instance that they fail or refuse to pay the mechanic.
How can Coulter Roache help?
If you are considering sowing or harvesting someone’s crop in return for a fee/payment, contact a member of our Agribusiness Team today to discuss the terms of engagement and whether or not you wish to reserve a crop lien to ensure that you are able to recover your costs and expensed in performing the work should the consuming party fail to pay you for your services.