With art becoming a more prominent asset class, purchasers must be cognizant of the law. Just as real estate transactions are accompanied by extensive due diligence, the same should be done with art. To complete due diligence, buyers must consider an object’s title, legal status, and authenticity.
Burgeoning collectors must realize that an object’s ownership history affects its value. If a work of art has unclear provenance, a prior owner may be able to contest its ownership. For example, art that left Europe during the Nazi regime should be scrutinized because of the risk that it was stolen. US courts have confirmed that heirs of rightful owners may have legal title to those works.
Issues related to cultural heritage are even more complex. Antiquities removed from source nations without proper documentation may be illegal to sell and vulnerable to seizure. Before purchasing antiquities or works over a specified age (in some cases, objects over 100-years-old are considered “cultural heritage”), buyers should confer with legal experts about the import and export requirements and documentation to accompany these objects. In cases where a nation does not demand restitution, collectors may still find it impossible to donate, consign, or sell the works.
To wisely build a noteworthy collection, it is imperative that collectors consider the law. Failure to do so can make the most impressive acquisition a costly liability.
Leila A. Amineddoleh is a Partner at Galluzzo & Amineddoleh LLP. She may be reached at Leila@artandiplaw.com or 646-405-4903. Disclaimer: This article is intended as general information, not legal advice, and is not a substitute for retaining representation.