Buying expensive art requires a good eye and, presumably, a strong stomach. Judd Grossman, a lawyer in Manhattan who helps clients in the purchase of high-priced works of art, principally writing purchase agreements and occasionally taking a misrepresentation to court, said that art collecting involves “trusting your gut” and having “an appetite for risk.”
Buying art is so dicey because so many things can go wrong. The artist falls out of favor, causing prices to drop. The artist disavows his or her own work in the manner of artist Richard Prince, who in 1988 disclaimed paintings, drawings, collages and etchings he had created in the 1970s because “I didn’t like the work I did ten or so years ago,” or artist Cady Noland, who disclaimed authorship of two of her artworks (Cowboys Milking and Log Cabin Blank with Screw Eyes and Café Door) because of how buyers had them restored. That’s money down the toilet.
In the case of works by dead artists and works produced outside of living memory, there can be thorny issues around authenticity. Can buyers ever be truly sure that such-and-such an artist created a work? It’s certainly not an insuperable problem—old art is sold every day by dealers, galleries and auction houses without kicking off expensive lawsuits. First, there’s provenance: the history of ownership that, in its most complete form, provides a literal paper trail (sales receipts, contemporary descriptions, exhibition history and photographs) starting from the artist’s studio and ending at the present day. Then there’s scientific analysis (examining pigments, the canvas and any underpainting, for instance) is used more often to disprove attribution than to prove one—LMI Group’s work on its alleged Van Gogh notwithstanding. Finally, connoisseurship plays a role in art authentication—people and institutions with expert insight into a given artist’s work will offer a learned yea or nay.
That said, proof of authenticity is often easy to come by but may not hold forever. Experts can and often do disagree, and being mere mortals, they also die, leaving space for another expert to step in with an alternate view. And in our litigious world, it’s all too easy to shoot the messenger. Over the past thirty years, a number of art authentication committees, mostly set up through the estates of deceased artists (Jean-Michel Basquiat, Keith Haring, Roy Lichtenstein, Pablo Picasso, Jackson Pollock and Andy Warhol) to ensure correct attribution of their works have been disbanded due to the threat or the fact of lawsuits—usually brought by deep-pocketed art collectors who didn’t want to hear no. ‘You pays your money, you takes your chance,’ doesn’t always apply.
Instead of, or in addition to, authenticating, some estates form catalogue raisonne committees that evaluate all known works by their artists, including those fully attributed, and publish their findings in a book to be used by buyers and sellers alike. It seems simple enough, though excluding works from a catalogue raisonné can also lead to lawsuits. In 2016, London’s Mayor Gallery sued the Agnes Martin Catalogue Raisonné committee (which included Pace Gallery founder Arne Glimcher) for leaving thirteen paintings out of the catalogue. Three years later, a New York State Supreme Court judge dismissed the case.
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Given all that, how should collectors who intend to drop a considerable amount of money on a work of art protect themselves from making costly mistakes or getting wrapped up in expensive litigation? The answer is that there are very few problems that can’t be solved with even more money. As a matter of law, the statute of limitations gives buyers four years to prove that something they purchased is a fake or otherwise misattributed, in which case the seller must return money received for the inauthentic artwork. (Auction houses in New York allow five years.) If any questions arise, this is the time period in which to find answers. After that four-year period, art buyers may still bring legal action against a seller, but only if they’re claiming fraud—that the seller knew that the statements being made about title, authenticity and condition were untrue. “Fraud means concealment of the truth, that the seller knew what he was saying was false,” Boston lawyer Nicholas O’Donnell told Observer. “It’s not easy to make that case.”
Paying an expert to confirm provenance is one of the best ways to protect oneself and one’s investment. There are professional provenance researchers for hire, though art advisors, which many well-heeled collectors use, often do this type of authentication as part of their client services. “For a client, I will look for a particular work in a catalogue raisonné and, if there is no catalogue raisonné, I’ll see if the work had been included in any museum or gallery shows, whether or not there were any photographs of it in an exhibition catalogue and if it has been written about, as well as by consulting dealers and experts in the artist’s work, even family members of the artist,” New York City art advisor Todd Levin told Observer. He added that art advisors “act as fiduciaries” for their clients.
But mistakes can still happen. An advisor who didn’t do enough research or didn’t do the right research or withheld pertinent information could potentially be liable if an artwork is determined to be inauthentic, Grossman said. One DIY avenue of research involves digging into who the seller is, whether it’s a gallery or dealer or individual. But the Better Business Bureau is an unlikely place for dissatisfied art collectors to let off steam, and the associations to which dealers and galleries may belong—even those with codes of ethical conduct—tend not to discipline wayward members. The owner of Harcourts Modern and Contemporary Art Gallery in San Francisco declared bankruptcy and fled the country as a result of improper business practices, yet “none of us had any inkling of the problems,” John Pence, then president of the San Francisco Art Dealers Association, told Observer. “We don’t know the inner workings of each other.” Similarly, the Middendorf Gallery in Washington, D.C., Manhattan gallery owner Lawrence Salander and New York’s Knoedler Gallery all faced accusations of fraud without their respective professional associations taking any action.
Even simply asking around can help a collector get the scuttlebutt. “There were a lot of people who questioned Larry Salander’s lavish lifestyle and wondered if his claims about what he had sold and for how much were really true,” Chicago arts lawyer Scott Hodes told Observer. “Getting references from other dealers makes sense.”
Hodes also recommends that buyers or consignors ask dealers and galleries for bank references to determine the nature and length of the relationship between the gallery and the bank, as well as if there have been any difficulties, which might include bounced checks. Additionally, consignors of artwork often file a UCC-1 form under the Uniform Commercial Code with the Secretary of State’s office—assuring the consignor that, in the event the gallery declares bankruptcy, he or she will get the consigned objects back rather than having the art treated as general gallery assets to be divided among preferred creditors. One can look online (at the website of the Secretary of State) to see how many UCC-1 filings there are. “If there are a lot of filings, that suggests that the dealer doesn’t really own much that is in the gallery,” he said. “A dealer without much in the way of assets may be financially overcommitted, leveraged to the hilt. You might be wary of working with that kind of dealer.” Does that mean the artwork they’re selling is suspect? Not necessarily, but shady is as shady does. Buyers should think carefully before involving themselves with a gallery or dealer involved in a lot of lawsuits (something also easily searchable).
Hiring lawyers increases up-front costs but can save buyers legal fees down the line. “Always consult a lawyer first,” Grossman said, recommending that attorneys should write up purchase agreements with dealers and galleries, particularly when the desired object is expensive or for which there may be questions now or in the future about its attribution. The price for him composing a purchase agreement ranges from $5,000 to $50,000, depending upon certain complexities in the sale (e.g., when the title passes, what happens if there arises a problem with the title, what happens if questions arise as to authenticity, what happens if the artwork’s condition is not good, how payment will be made, on and on). Anne-Laure Allehaut, a lawyer specializing in art law at the New York firm Patterson Belknap, told Observer that “where there are risks, contracts are meant to address risk allocation, so as a buyer, I would at least request an authenticity warranty to be added to the invoice. That is a simple and cost-effective step for anyone. Past the four-year period, the risk will shift to the purchaser.”
Art buyers may think themselves clever if they are up-to-date on art terminology—frottage, institutional critique, site-specific… that sort of thing—but perhaps the most important term they need to know is one borrowed from the legal profession: “due diligence.” Of course, even then, all the expensive research and planning only shorten the odds. “While the insurance industry has developed title insurance for high-end art,” Daniel H. Weiner, a partner at the New York City law firm Hughes Hubbard & Reed, said, referring to protections if the title to an artwork has defects, such as a lien or claims of theft, “authenticity insurance is not yet available.”
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