By | July 19, 2017|Categories: Nonprofit|Industries: Nonprofits,Private Foundations,|

What laws govern the ownership of artistic work? There have been numerous cases brought to court in the past few decades regarding the subject of legal title of artwork. One of the most famous and public cases was the Republic of Austria v. Altmann, in which the plaintiff, Maria Altmann, argued that five paintings, painted by Austrian artist, Gustav Klimt, and housed in the Austrian State Gallery, were stolen by the Nazis during World War II, and legally belonged to her family. Ms. Altmann’s case was centered on two principles. First, that although her aunt (who was the subject of two of Klimt’s paintings) had willed the painting to the museum upon her husband’s death, she in fact was not the legal owner as her husband was the one who had paid for the paintings to be commissioned. Second, that the paintings were stolen by the Nazis and placed in the Austrian State Gallery by a Nazi-collaborating curator, and not when the husband had died. Ms. Altmann eventually won the case in 2004, receiving legal title to the paintings. Her story and struggle was later made into the 2015 movie, “The Woman in Gold”. This is just one example of the often complicated and ever-developing issue of legal title to artwork.

Provenance is defined as “the history of ownership of a valued object or work of art or literature.” Provenance can take various forms of documentation such as a signed certificate or statement of authenticity from a respected authority, a verbal or written statement from the artist, a sales receipt directly from the artist, an appraisal from a recognized authority or expert on the artist, and many more. The stronger the trail of documents, both paper and verbal, the stronger the owner’s claim to keeping the piece of art and enhancing its value. So what can a museum, gallery, or art collector do to establish their claim to the piece of art?  Here are a few examples of due diligence that one should perform prior to making a purchase of art

  • Ensure that the provenance documentation specifically describes the piece of art – including information such as dimensions, medium, date of creation, title, and other relevant details.
  • Ensure that the documentation is original and hand-signed, hand-stamped, or marked by hand whether it’s digitally printed, hand-typed, or handwritten. Photocopies of letters, certificates, and other documents are not valid forms of provenance unless the originals are at a known and identifiable location.
  • Get the full names and contact information for all private parties who the seller claims previously owned the art. Perform due diligence by confirming that these people exist or existed and if possible, contact them or their descendants to directly confirm the claims. Similarly perform the same steps with all art galleries or auction houses that the seller claims previously owned the art.
  • All statements sellers make about who owned the art or where it came from must be verified and cannot be conditional or from a third-party.
  • If the seller states that the work of art sold at an auction house, then have the seller provide the name and contact information of the auction house as well as the date of sale and lot number to ensure that the art was actually sold at the auction house. However, just because it was sold at an auction house does not automatically prove the authenticity of the work, but will be another source of provenance for the art.

Some museums have begun to take steps to research and publish the provenance of their collections. A good example is the Metropolitan Museum of Art, who began the Provenance Research Project in 2000. The purpose of the project was “to determine whether any works of art in the Museum’s collection could have been unlawfully appropriated in the Nazi era and not subsequently restituted to their rightful owners.” As research is completed, artworks are added to the Provenance Research Project list, which is also published on the Nazi-Era Provenance Internet Portal, a central registry for U.S. museums and a great resource to check if research has been performed on a specific object or artwork.

The issue of clear legal title is not just limited to theft. In fact only 25 percent of ownership claims in the art market are related to historical and contemporary theft; 75 percent are based on traditional liens and encumbrances and more general questions of legal authority to sell.  The lack of transparency in the art market, coupled with issues surrounding artwork in estate, trust, and financial planning (such as art lending or artwork in a will), create a difficult legal landscape for the clear title of artwork.  Click here for some examples of non-theft title risks and claims

  • Authority to sell: A claim against a purported seller as to whether that person/entity has the authority, as owner or agent of the owner, to sell or transfer ownership of the property.
  • Multi-collateralization of art. An owner/borrower uses his property to secure a loan with multiple creditors without full disclosure of prior, existing liens.
  • Gallery conversion cases. Cases involving galleries that sell a consignor’s art without paying the consignor or in violation of the consignment agreement, such as without the consignor’s consent or below a minimum agreed-on price point.
  • Import/export. A claim that movement of art across borders violated regulated import and export of goods internationally.
  • Loans/gifts to museums. A dispute about whether property in a museum’s possession was loaned (for exhibition only) or gifted (ownership transferred to the museum).

While the history of many pieces of art is often opaque, due to the largely absent rules surrounding documentation of legal title and privacy concerns, the best protection against claims against your art is to perform your due diligence and research before purchasing the artwork.