Retention of Title
A clause keeping legal ownership of goods with the supplier until the customer has paid in full, often shortened to RoT.
What it does
A retention of title clause, sometimes called a Romalpa clause, states that ownership of supplied goods stays with the seller until payment is received. If the customer fails to pay or becomes insolvent, the supplier may have a stronger claim to recover the actual goods rather than queue as an unsecured creditor.
Perfecting the interest
In Australia an RoT clause usually creates a security interest under the Personal Property Securities Act. To rely on it against other creditors, register the interest on the PPSR. An unregistered interest can be lost on insolvency, so make registration part of your credit policy.
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