Art ‘Investors’: Are You Collecting Art or Merely Decorating?
There’s a difference between the two. Before you buy or sell a piece of art, consider some guidelines on authentication and what might make one piece of art valuable, and another merely a nice complement to your sofa.
My wife, Trish, creates fiber art. She has designed and created hooked rugs, furnishings and wall hangings using materials from wool suits, prom dresses, seashells, utensils and spools.
Her kind of repurposing has long been central to artistic expression. From “objet trouvé” (found art) pieces to Robert Rauschenberg’s Bed (1955) and Andy Warhol’s Coca-Cola (3) (1962), artworks long cherished by collectors have incorporated the ordinary in extraordinary ways.
In fact, art has always defied definition. Every human creation has value to someone, ranging from traditional mediums like ceramics, sculptures and paintings to furniture, jewelry or antique autos. Many attributes can elevate a crafted item you find aesthetically pleasing to great art, but usually, influential art has cultural, historic, sentimental, creative, spiritual and/or derivative value.
In addition, it can have great financial value.
Most of us start collecting pieces purchased at art fairs to decorate our homes. Still, we question whether the artists whose work we’re supporting will grow significant and our purchases truly valuable. The current popularity of an artist does not necessarily equate to historical significance, and artists who today are considered wildly influential often toiled in anonymity for long periods of time. Vincent Van Gogh, an incredibly prolific painter who finished about 900 works over a decade, allegedly sold only a single painting before his death. The best advice I’ve heard for collecting came from a sommelier friend: “To truly appreciate wine requires a corkscrew.”
What do you need to know before you buy?
First, some legal considerations. When you purchase artwork from an artist, be aware that the artist retains a legal property-type interest in the proper attribution and integrity of the artwork. The artist has the right to be identified as the creator of the work, and a renowned artist has the right to prevent intentional distortion, modification and destruction of recognized artworks. Also, the creators, or their descendants, often retain all rights to reproduction and copyright, unless you negotiate for those rights when you buy.
When you buy from another collector or a dealer, you naturally assume that you are the true owner. That’s not always true. The proper owner has “title” to the artwork. A work’s provenance includes its custody, transfer and ownership history. You can delay final purchase until an independent expert researches the work’s provenance. You should seek a complete record of all the known transferors and transferees in much the same way as transfers of land are recorded. Your “title” to any artwork you buy is only effective if the provenance of the artwork is clear and every past transfer was a bona fide transaction by a seller with a clear title. Even a Certificate of Authenticity does not necessarily provide you with a right to damages if a work of art is later discovered to be inauthentic.
The true owner of a lost/stolen artwork may have superior title to even a good-faith purchaser, regardless of how much time has passed. Your only recourse to recover damages for a purchase of stolen art may be against the dealer/seller. If you have recorded the artwork’s provenance and bibliography, and it supports a public chain of title, then the true owner’s claim may be weakened. This is not an issue when you purchase from the artist directly.
How can you enhance and protect an artwork’s value?
- Document the artist’s credentials, training, notable exhibits and influential sales.
- Record the artwork’s general description, its title, origination date, dimensions, materials used, condition, distinguishing features, inscriptions and markings, purchase price, documented value/appraisal, and obtain any certification of authenticity.
- Create or obtain a bibliography: a compilation of citations and mentions in print and social media. A large and thorough bibliography for the artist, your purchase and any related pieces, will help document the artist’s cultural influence.
Most homes aren’t suitable to store artwork that incorporates pigments, resins, oils, plant and nut extracts, fiber, paper, wood and plastics that decay or decompose naturally over time. These elements may deteriorate faster in sun or artificial light, at room temperature, under normal humidity, and from common household dust, mites and other contaminants. Investigate how to protect your art by interviewing the artist and doing some research. Strongly consider whether you can afford the expense of housing, insuring and protecting an expensive art find before you buy.
Finally, be a trendsetter. The artwork that challenges you, is provocative, inspires an emotional response or incorporates the highest form and talent in its expression has the greatest likelihood of weathering the cruel transience of human desire. Consider Marcel Duchamp’s Fountain (1917). Even bad taste is superior to no taste at all.
About the Author
Senior Vice President, Argent Trust Company
Timothy Barrett is a senior vice president and trust counsel with Argent Trust Company. Timothy is a graduate of the Louis D. Brandeis School of Law, 2016 Bingham Fellow, a board member of the Metro Louisville Estate Planning Council, and is a member of the Louisville, Kentucky and Indiana Bar Associations, and the University of Kentucky Estate Planning Institute Program Planning Committee.