A change demand is where a debtor, or other party with an interest in the collateral, demands registration of a financing change statement (to amend or discharge the financing statement).
This may be for one of several reasons given under section 162 of the Personal Property Securities Act 1999 (PPSA). The reasons include the following:
- all the obligations under the security agreement have been performed (e.g. the debtor has fully repaid the loan and the financing statement should be discharged)
- the secured party has agreed to release part or all of the collateral
- the collateral described in the financing statement includes an item that is not collateral in the security agreement
- no security agreement exists between the parties
- the security interest is extinguished in accordance with the PPSA.
The basic steps in the change demand process
- Before lodging a change demand, the debtor or a person with an interest in the collateral must first give written notice to the secured party of their demand.
- If, after 15 working days, the secured party has not responded to this demand the debtor or interested party may then lodge a change demand on the Personal Property Securities Register.
- The secured party has a further 15 working days to either:
- accept the change demand (online at www.ppsr.govt.nz) or
- obtain a court order to maintain the registration (Refer to sections 162 - 169 of the PPSA for information relating to obtaining that court order).
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Where the secured party wishes to accept the change demand, it is a simple process to record that acceptance online. You will need the Financing Statement Registration Number and PIN to accept a change demand.
A secured party must obtain a court order to prevent the registration of a financing change statement arising from a change demand.
If the debtor, or other interested party, discovers that any of the security interest's details recorded on the PPSR are wrong, they have the right to ask them to be corrected. In certain circumstances they can take the step of lodging a change demand to formally request correction of the registered details.