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Ensuring Clear Ownership of Artwork

Title disputes concerning pieces of art are on the increase and the complexity as well as severity in relation to the claims is also increasing. Ownership history is an increasingly sensitive issue for buyers and sellers since the purchase of a piece does not necessarily mean the buyer owns it. Anyone purchasing pieces of art falls under the principle caveat emptor (buyer beware) as with any other transaction. The seller has no obligation to volunteer information to the buyer about the relevant piece of art. However, if the seller does provide information about the piece then it has to be correct. Although it is generally expected that the buyer will perform due diligence to confirm any ownership and authenticity issues, this is an increasingly difficult procedure. Art crime resulting in issues over ownership rights are now the third most prevalent crime around the world. Here we examine the various problems in determining and proving who owns a piece of art.

When do disputes arise?

Problems relating to the ownership of art are not a new issue but were highlighted in 1998 with the creation of the advisory commission on Holocaust assets that published their final report in 2000. The largest art theft in history occurred when the Nazis stole 650,000 pieces of art including paintings, sculptures, gold and antiquities (or “forced sales”) from around Europe, known as Nazi plunder. The vast majority of these pieces were never recovered. All levels of Nazi officials were involved in this, and between the end of 1940 and July 1944, 30 train convoys left Paris with 1,200 crates of masterpieces. It is estimated that the Nazis took 20% of the art of Europe and stored in castles, cellars and warehouses. This has had a massive impact on the title of a lot of pieces that predate the Second World War. Artwork with tainted histories can result in severe repercussions for a current owner that does not return them.

However, this does not mean pieces created after this time are not without their issues. More than 15% of the stolen or missing artwork on the Art Loss Register, an international database, was made after this period- that’s around 45,000 pieces of art.

Issues on ownership can arise for various reasons and not just as a result of theft. If there are joint owners and one sells without the permission of all the owners, then the buyer may be a co-owner rather than the sole owner, which could severely impact on the rights and value of the share. There can also be liens or charges over the artwork, where for example the piece is used as collateral for a bank loan. Issues can arise because of inheritance or will disputes where a person alleges the deceased person had gifted the piece to them before they died. If a piece is regarded as a national treasure, then there are laws in place governing how and when it can be removed from that country, including temporary export bars, to protect these valued artworks.

Checking provenance

The rising price of art has been one of the reasons for the increase in art ownership disputes. Artwork should come with documentation that states where it has come from, known as provenance. If this is done well it can provide vital evidence on the origin. Provenance does not prove that the artwork is authentic- this is a different matter. Traditional provenance checks will identify if there are any gaps in possession of the piece but do not resolve if there is clear legal ownership. If there is an issue on the title to a piece of art, this can adversely affect the value of the piece. The initial sale may be correctly documented and prove it was legal but what happens to the artwork after that can be an issue. Art theft is a multi-billion-pound industry arising from the fact the art market is one of the largest legal global markets. But other circumstances can result in issues over ownership including probate issues, divorce, bankruptcy and creditor issues. These financial situations can create a tangle of ownership that is very difficult to trace and determine.

A major issue in following the trail of ownership with pieces of art is the element of anonymity that often surrounds the world of art. This makes determining who owns the artwork incredibly difficult. Generally, the owner of the artwork is not at the gallery or auction where the sale is taking place, meaning that the buyer does not know who they are. The contract for the sale of the art will usually state that the seller has clear title to the artwork. However, there is unlikely to be clear evidence to show the seller had conclusive evidence to determine they had this.

It is, therefore, necessary for buyers of artwork to proceed with extreme caution and to determine not just the provenance of the piece but also that there is, in fact, correct legal title. Provenance checks must be investigated thoroughly since this can also highlight ownership issues. Buyers must ensure they check the various art title databases that are available to determine if there are any issues with the title. Checks concerning the sellers and relevant auction house (including professional background checks for high value pieces) to ensure they are reputable can also protect against issues. Moreover, it is possible to obtain art title insurance to protect against the risk of defects in the title emerging after buying a piece of art and protects the buyer against future claims.

Cases of disputed title can be complicated and time-consuming, particularly where a third party claims to have true ownership of a piece of art. Owners of artwork who have their right to ownership challenged can find this both emotionally and financially draining. This area of law is very niche and complicated. Anyone involved in a dispute regarding the ownership of a piece of art needs to take expert advice from a specialist lawyer who can guide on the relevant approach to ensure the best possible outcome.

Contact our Art Dispute Litigation Lawyers, London

The art disputes solicitors at Selachii are experts in this area of law. We understand how important it is that your most valuable personal and business assets are protected. Our team provide high-quality advice on the full range of contentious matters involved in art disputes, from ownership to authenticity, and strive to get you the quickest, least disruptive and most affordable solution. We have a wealth of experience representing private collectors, auction houses, dealers, galleries and artists involved in art disputes.

We don’t believe in simply handing out one-size-fits-all solutions to problems. We will focus on your specific circumstances before working out the best and most cost-effective way of helping you achieve your aims.

If you are involved in an art dispute and you need specialist advice, please contact our solicitors today. Call us on 020 7792 5649 or email info@selachii.com.

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