Real Problems

Real Risk

Art Title Protection Insurance (ATPI)®, available from Liberty, provides real assurance that art is truly yours — to keep, lend, display, transfer, or sell. Liens due to divorce, judgments, taxes, bank loans, or consignment issues present significant, costly hurdles for collectors and institutions alike. Plus, historical events that affect art still pose threats to ownership. Here are several events that challenged ownership.

Real Protection:

Learn how ATPI® helps you avoid problems when buying, selling, gifting, or exhibiting fine art.

Bankruptcy:After receiving complaints about fraud and amid a flood of claims, the Manhattan District Attorney launched a criminal investigation into the practices of a New York gallery. Shortly thereafter, the gallery was closed and locked by a judge's order, and the owners filed for personal bankruptcy. Individual and institutional collectors and other galleries claimed they were not compensated for consigned artworks and that their works were sold without legal authority. In addition, buyers of art sold by the gallery may very likely face title challenges as well.

• Read how a bankruptcy impacted art buyers.

Theft: Most buyers have no idea they are purchasing a stolen piece of art — the theft may have occurred decades ago. Stolen property remains stolen property, because clear title cannot be passed, even for good-faith purchasers who are unaware of the theft.

• Read how theft impacted an unsuspecting owner.

Consignment Problems: Sellers and living artists often consign their work to dealers under explicit terms. According to recent court decisions, sales that do not conform to these terms can convert the art in question into stolen property.

• Read how one good-faith buyer was not protected, even though the provenance was clear.

Liens: Borrowing against the value of art is an increasingly common practice. Because there is no place that these liens are required to be filed, even the best provenance searches can fail to turn up major title problems.

• Read more about a fascinating case.
  
  

1031 Exchanges: Collectors seeking to take advantage of 1031 exchanges are subject to time limits for completing their transactions. Without the benefit of ATPI®, title challenges can push the completion of these transactions beyond the time required to complete the 1031, causing significant tax complications.

Authority to Sell: When works of art have been acquired through bequests, the authority of institutions or individuals to sell can be murky. ATPI® protects both buyer and seller in cases where the authority to sell is challenged.

• Read more about issues related to bequests.

Rights of First Refusal: A growing number of contemporary artists and dealers are including rights of first refusal in their bill of sale. These rights could be asserted even after a work of art has traded hands multiple times. ATPI® protects collectors and their investors from this growing problem.

Contact Jennine Orphanides:

212.324.0011
jorphanides@libertyarttitle.com

• Read more about how rights of first refusal can affect a purchase or sale.