Knowledge · Finance
PPSR and retention of title,
who owns the goods on your site.
The frames are stacked on site, the invoice is unpaid, and the supplier has just gone into administration. Who owns the frames? That question is answered by a clause signed at account opening and a national register most builders have never searched. This reference covers retention of title from the builder’s side, how the PPSR works, what insolvency does up and down the chain, and the hygiene that makes the bad fortnight survivable. General information, not legal advice.
01 / Overview
What retention of title and the PPSR are
Retention of title is a clause in a supplier's terms that keeps ownership of goods with the supplier until they are paid for, even after delivery. It is close to universal in builder merchant accounts, and while every invoice is paid on time it does nothing at all. Its entire purpose is the bad day: when payment stops, or when a business on either end of the account fails, the clause decides who owns the materials sitting on site.
The Personal Property Securities Register is where clauses like that become enforceable in practice. Under the Personal Property Securities Act 2009 (Cth), a retention of title arrangement operates as a security interest in personal property, and the PPSR, the national online register operating since 2012, is where such interests are recorded and ranked. The short version of a complicated statute: a registered interest generally survives an insolvency; an unregistered one generally does not, whatever the contract said. That single asymmetry explains almost everything else on this page. It is also why finding suppliers registered against your company is normal, and why the register cuts in your favour only when your own business registers its interests too.
Where this sits in the library
The clause itself arrives inside the merchant credit terms covered in materials supply terms, alongside the directors' guarantee it usually travels with. This node is the reference for the register and the insolvency mechanics: what the interest actually is, what happens up and down the chain when a business fails, and the standing hygiene that belongs in the office routine. Everything here is general information about how the regime commonly works, not legal advice; the Act has detail, exceptions and case law this page deliberately does not carry, and a live insolvency or dispute is a matter for a legal adviser immediately.
02 / How it works
The life of a retention of title interest
From the credit application to the insolvency that tests it. Six steps, most of them invisible in normal trading, which is exactly why the last one surprises people.
- 01
The credit application carries the clause
A builder opens a merchant account and the terms include a retention of title clause: the supplier keeps ownership of the goods until they are paid for. The clause arrives as boilerplate, signed once, and governs every delivery on the account from then on.
- 02
The clause becomes a security interest
Under the Personal Property Securities Act 2009 (Cth), a retention of title arrangement is treated as a security interest in the goods. What the supplier holds is no longer just a contract term; it is an interest the law will rank against other creditors, if it is registered.
- 03
The supplier registers on the PPSR
The supplier records its interest on the Personal Property Securities Register, the national online register of security interests in personal property. This is routine credit practice, done at account opening, and it is why almost every builder has registrations recorded against its company.
- 04
Goods are delivered, on someone else’s title
Frames, trusses, fixtures and stock arrive on site and go into the builder’s possession, but until they are paid for the supplier retains title under the clause. Possession and ownership have separated, which nobody notices while every invoice is being paid.
- 05
Payment ends the interest, item by item
As invoices are paid, title passes and the security interest over those goods is discharged in substance. The paper trail that proves which deliveries were paid, the matched invoices and remittances, is what settles any later argument about which goods on site were whose.
- 06
Insolvency is where the registration decides
If either business fails while goods sit unpaid for, the register decides most of the outcome. A registered supplier stands as a secured party over the unfixed goods; an unregistered one generally falls into the pool with the unsecured creditors, whatever its contract said.
The step that does the deciding is the registration, and it happens years before it matters, at account opening, as paperwork. The concept doing the work underneath is priority: the Act ranks competing claims to the same property, registered interests generally rank ahead of unregistered ones and of unsecured creditors, and certain supplier interests (the purchase money security interest concept) can take a special priority in the goods they financed. The detail of priority is legal territory; the operational takeaway is simpler. In an insolvency the register is close to the scoreboard, and the time to influence it was account opening.
03 / The bad fortnight
Insolvency up and down the chain
When a supplier collapses. An administrator or liquidator arrives with a duty to gather the failed company's assets, and its retention of title register entries point straight at your site. The practical questions come fast: which deliveries were paid for, which goods are still unfixed, and what does the registration actually cover. Goods you have paid for are yours, if you can prove it quickly, which is where matched delivery and invoice records earn their keep. Unpaid, unfixed goods are where the supplier's interest lives. Materials already built into the house are generally treated differently, because goods that have become part of the building are no longer simply repossessable stock; where exactly that boundary sits is a legal question, not a site one. The same collapse usually also disrupts supply mid-job, which is a supplier management problem arriving at the same hour as the ownership one.
When a builder collapses. The mechanics run in reverse. Registered suppliers stand as secured parties over their identifiable unpaid goods and deal with the insolvency practitioner from that position; unregistered suppliers generally watch their clauses fail and their goods vest in the estate, and claim alongside the unsecured creditors. For a builder reading this while solvent, the sober lesson is about the balance sheet: the unpaid stock on your sites is commonly not your asset, and a working capital position that quietly counts it as one is overstated by exactly that amount. Builders watching a struggling client or head contractor should read the same mechanics as a warning about whose assets are actually reachable.
Evidence class note. The statements above about registration, priority and vesting describe how the Personal Property Securities Act 2009 (Cth) commonly operates, at the level of concept. The Act's application to any real insolvency turns on detail, timing and case law, changes with amendment, and belongs with a legal adviser. Confirm current requirements at ppsr.gov.au or with an adviser before relying on any of it.
04 / Practical hygiene
The register disciplines worth running
None of these takes an hour a quarter, none needs a lawyer on retainer, and each one is either cheap now or expensive later. This is the operational content of the whole topic.
Know what is registered against you
Search your own company on the PPSR periodically. The list should look like your live supplier accounts. Registrations are normal credit practice, not a mark against the business, but the list should be explicable, because lenders and insurers who search you will read it.
Have stale registrations discharged
When an account is closed and paid out, ask the supplier to discharge its registration. Stale registrations accumulate quietly and can slow or complicate finance applications years later, when the supplier who registered has been taken over twice and nobody remembers the account.
Search before buying used plant or vehicles
A PPSR search by serial number before buying second-hand plant, vehicles or equipment shows whether the item carries someone else’s security interest. Buying encumbered plant can mean buying the seller’s debt; the search is cheap and the alternative is not.
Keep delivery and payment records matched
In a supplier insolvency, the practical question is which goods on site were paid for. The builder whose purchase orders, delivery dockets and invoices are matched can answer in an afternoon; the builder reconstructing from statements answers slowly, to an administrator with a deadline.
Register when you are the one supplying
If your business supplies goods on credit terms, hires out plant, or leaves materials on other parties’ sites under arrangements where you keep title, the same rules cut in your favour only if you register. An unregistered interest is the thing insolvency practitioners take.
Read the clause with the guarantee
Retention of title rarely travels alone. The same credit application commonly carries a directors’ guarantee, and the two together define what a supplier collapse or a payment dispute reaches: the goods on site and the director personally. Both belong in the one-page account summary.
05 / Common mistakes
Where builders get PPSR and retention of title wrong
Almost all of these are beliefs rather than actions: things assumed about ownership and the register that were never checked, discovered in the one fortnight when checking is no longer possible.
Assuming possession means ownership
The stack of frames on site, delivered and unpaid, most likely still belongs to the supplier under the clause signed at account opening. Builders who count unpaid stock as their asset, in their heads or their books, discover otherwise at the worst possible time.
Panicking at registrations against the company
Finding suppliers registered on the PPSR against your business is not a sign of distrust or distress; it is standard credit practice, the same way the builder’s bank registers over the company’s assets. What matters is that the list matches reality, not that the list exists.
Buying plant without a serial number search
Second-hand excavators, utes and trailers carry finance more often than sellers volunteer. Skipping the PPSR search to save a small fee, on a five-figure purchase, is the worst risk-per-dollar trade in the industry.
Assuming fixed materials can be repossessed
Goods built into the house are generally treated differently from goods stacked on site: once materials become part of the building, the supplier’s practical recourse changes and repossession is generally no longer the remedy. Where that boundary sits in a live dispute is legal territory, not site judgement.
Leaving your own interests unregistered
A builder who supplies on credit, or leaves owned materials and plant on someone else’s site, and does not register, is relying on a clause that insolvency law may not honour. The vesting risk, an unregistered interest being lost to the insolvent estate, is the whole reason the register exists.
Treating it as someone else’s problem until insolvency
PPSR questions surface almost exclusively in the fortnight after a collapse, up or down the chain, when nothing can be fixed. Every discipline on this page is cheap before that fortnight and impossible during it.
06 / Best practice
How experienced operators handle it
The operator's observation is that PPSR literacy in residential building is learned almost exclusively by ambush: a supplier collapses owing frames to four jobs, or a builder buys a second-hand machine that turns out to carry someone else's finance, and the whole office learns the vocabulary in a week. The operators who handle it calmly are never the ones who know the Act; they are the ones whose records were already straight. They can say which deliveries on which site were paid, because the purchase orders, dockets and invoices were matched as the job ran, and they know what is registered against the company because someone searches it once or twice a year and keeps the list explicable.
The disciplines that make that possible are already covered elsewhere in this library, which is the point: nothing about the PPSR asks a builder to run a new system. The purchase order creates the commitment, receiving and matching proves what arrived and what was paid, and the account terms live in the one-page summaries recommended in materials supply terms. In VIABUILD that trail is kept as a side effect of normal work, POs, deliveries and invoices matched per job in one place, which is not a legal position, but it is the evidence a legal position gets built from in the week it is needed.
07 / FAQ
Common questions.
It means the supplier keeps legal ownership of the goods until you have paid for them, even though the goods are on your site and in your possession. The clause sits in the credit terms signed at account opening and applies to every delivery on the account. While every invoice is paid on time the clause is invisible; it matters when payment stops or when either business becomes insolvent, because at that point it decides who actually owns the unfixed materials on site. Under the Personal Property Securities Act 2009 (Cth) such a clause operates as a security interest, which is why it connects to the PPSR at all. This is general information, not legal advice, and the application of the clause to any live situation is a matter for a legal adviser.
The Personal Property Securities Register, the single national online register of security interests in personal property, operating since 2012 under the Personal Property Securities Act 2009 (Cth). Personal property here means most property other than land and buildings: goods, plant, vehicles, inventory, crops, intellectual property. Anyone can search it for a fee, and secured parties register their interests on it so those interests rank in an insolvency. For a builder it matters in two directions: suppliers register retention of title interests against the building company as routine credit practice, and the builder can search and register in its own right, most usefully before buying used plant and whenever the business itself supplies goods on credit. The register is run by the Australian Government and its guidance at ppsr.gov.au is the primary source for how registration and searching work.
On its own, no. Registering a retention of title interest at account opening is standard credit practice, done in bulk by merchants and manufacturers, and it says nothing about your standing; it is the supplier protecting its position in the same way your bank does. The registrations become a problem only when the list stops matching reality: accounts long closed with registrations never discharged, registrations from businesses you have never traded with, or a pattern a lender reads badly when assessing the company for finance. The discipline is to know what the list says, keep it explicable, and have stale registrations discharged when accounts close. If a registration looks wrong and the supplier will not resolve it, that is a matter for advice.
It depends substantially on what was paid for, what is fixed, and what was registered. Goods you have paid for are yours, and the matched records that prove payment are what make that quick to establish. Goods delivered but unpaid, still sitting unfixed on site, are where the supplier’s retention of title interest lives, and an administrator may assert it; whether the interest holds generally depends on the registration. Materials already built into the house are generally treated differently, because goods that have become part of the building are no longer simply the supplier’s to take back. Every one of those boundaries has legal detail this page does not carry, so in a live supplier insolvency with materials on site, get advice early, and expect the quality of your delivery and payment records to decide how rough the fortnight is.
Suppliers with registered retention of title interests generally stand as secured parties in respect of their identifiable, unpaid, unfixed goods, which means they may recover those goods or their value ahead of unsecured creditors. Suppliers whose clauses were never registered generally cannot rely on them, and the goods can vest in the insolvent estate, leaving the supplier to claim as an unsecured creditor despite what its contract said. This is why serious trade creditors register, and it is also the sober half of the working capital picture: the materials a struggling builder is holding are commonly not assets it owns. None of this is insolvency advice; a business in difficulty needs professional advice well before these mechanics engage.
Only when your business is the one extending credit or leaving its property in someone else’s hands. Common builder-side cases: supplying materials or goods on credit to another business, hiring out plant or equipment for extended terms, and arrangements where your materials sit on another party’s site while title stays with you. In those cases an unregistered interest carries the vesting risk, so registration is what makes the arrangement worth its paper. Registration has its own rules about timing, descriptions and interest types, including the purchase money security interest concept that gives certain supplier interests special priority, and getting those details right matters, so set up your standard terms and registration practice with a legal adviser once, then run it as routine.
08 / Terms
Glossary for this topic
Retention of title or ROT (the supplier keeps ownership of goods until payment), PPSA (the Personal Property Securities Act 2009 (Cth)), PPSR (the national register of security interests in personal property), security interest (an interest in property securing payment or performance), grantor (the party whose property carries the interest, the builder on a merchant account), secured party (the party holding the interest, the supplier), PMSI or purchase money security interest (the special priority certain supplier interests can take in the goods they financed), vesting (an unregistered interest being lost to the insolvent estate), fixture (goods that have become part of the land or building, generally outside the PPSA), serial number search (the PPSR search run before buying used plant or vehicles). The wider vocabulary lives in the construction glossary.
The natural next reads are materials supply terms for the rest of the document the clause arrives in, and working capital for what unpaid stock does to the balance sheet picture.
09 / Keep reading
Related knowledge, guides and features
10 / Further reading
Primary sources
- The Australian Government's PPSR site (ppsr.gov.au), the primary source for how registering and searching work, current fees and processes, and its published guidance on retention of title arrangements.
- The Personal Property Securities Act 2009 (Cth), for the regime itself, read with the understanding that its application to real situations is specialist legal territory.
- A commercial or construction lawyer, for setting up your own supply terms and registration practice, and immediately in any insolvency touching goods on your sites.
The record is the position.
VIABUILD matches purchase orders, deliveries and invoices per job as the work runs, so when an ownership question ever lands, what was ordered, received and paid is already provable.