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| Follow the paper trail |
| Kishore Singh / New Delhi Feb 24, 2010, 02:18 IST |
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When managing your art collection for better investments, don’t neglect the paperwork — even given its current, dubious legality.
Nurturing your art investments is sometimes trickier than growing your wealth through more conventional means. That’s because in the financial and corporate worlds, professionals realise the value of the tradable entity — real-estate, funds, shares — whereas there are fewer specialists to guide you through the maze of investing in art. Therefore, it makes sense to spend a little time ensuring the worth of what you already own before you decide to buy any more art.
It cannot be stressed enough that while the work of an artist is the actual property in which you invest, it is the relevant papers that provide proof of ownership as well as the real indication of value. But what are the papers that are most relevant when it comes to buying or selling a work of art?
Clearly, the most important document is proof of authenticity. This is both easy and difficult. In the case of artists who sign and date their works, there is an easy chronology to follow, and galleries can show you (at least pictures of) similar works to compare against. The problem is mostly with artists who do not sign their works and are now dead. In such a case, and if you are spending a considerable amount of money to buy a work, you are within your rights to demand authentication, which can come informally from other collectors, or formally from other gallerists who have dealt with the artist, the artist’s estate, or even the artist’s family. Sometimes artists’ families charge money to authenticate a signature, or work — and there is the reasonable concern that for money they might authenticate even a fake work (as has been alleged). So you are best off resorting to not one but all means at your disposal to ensure the authenticity of a (mostly older) painting.
But don’t lower your vigilance even in the case of younger, contemporary artists — remember, Manjit Bawa and Anjolie Ela Menon were faked by acolytes in their own studios. Nor be embarrassed into silence: There are enough people in the art biz who are not above overlooking trade in fakes, and this is particularly true of artists from the Bengal school.
The next is provenance. Who first bought the work? Where was it shown, stored, displayed? Ask for catalogues and any other source where a work may have been published. Request receipts of purchase (sellers are usually reluctant to part with this because prices have risen sharply, and they don’t wish to have the buyer get into a process of negotiation based on the escalation). Ask for the framer’s bill, any restoration bill (and paperwork), auction papers, anything at all that proves the previous ownership, history and health of a work of art.
Increasingly, galleries now issue a certificate to guarantee authenticity as well as transfer of ownership of the work of art. In the case of the well-established auction houses, these certificates come with the assurance of compensation should there be any problem with the purchased work. In the case of galleries, there is less clarity on the efficacy of any such security — what legal scrutiny does such documentation stand up to? — because there have been no known cases where such accountability has been held to question. This much at least is certain: Galleries with a reputation may not return the purchase value of a work of art, but will probably agree to replace it with work or works of commensurate value.
If you buy art without the necessary paperwork, you can pick it up cheaper — this fact alone should make it suspect — but more importantly, you can never hope to sell anything at close to its market value if it is not backed by the appropriate paperwork. Just as in the case of property, payments are often made by both cheque and cash, which may be a short-term gain, but in the long term you will be better off having paid more cess on the full payment by cheque, because it leaves all guesswork out of the buying or selling price.
Just as important is getting appropriate insurance. Do not under declare value, since how much you insure a work for could prove important to a buyer. It is for this reason, too, that collectors are sometimes keen to see their works loaned to significant exhibitions. It is then in the interest of the exhibition organiser to seek appropriate insurance for all the works on loan to it, and this is likely to be the closest accurate value of that work of art. And since works selected for any such show are likely to be distinctive, they will increase significantly in value over other, similar works by the same artist.
Reason enough to be generous when a loan of your works is requested — but do check the insurance papers and amount before going out on a limb.
These views are personal and do not reflect those of the organisation with which the writer is associated.
kishoresingh_22@hotmail.com
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