Art loan agreement between private hands and public institutions is complicated business.
In addition to the joy and confirmation that the acquired work is of relevance, the art of private ownership is usually ideal and economic.
Museums can show works of this kind, whose prices are often beyond their budgets, mainly through temporary exhibitions.
However, there are partnership risks that affects both sides.
ART LOAN AGREEMENT CHECKLIST
- The art loan agreement contract calls the "hard facts" and ensures the insurance protection.
- In the art loan agreement, the insurance value is to be stated, which will be reimbursed in the event of a total loss.
- The status report is a must.
- Only what is transported by a designated art forwarder is insured.
- The loan of artworks costs time, money, effort (and sometimes nerves).
- For large collections, a professional management system is indispensable.
- A distinction is to be made between long-term lending and temporary lending.
There are partnership risks that affects both sides
The artist list was long: ranging from contemporaries like Rita McBride, Mark Dion, Pipilotti Rist and Andreas Slominski to anonymous painters of the 18th century.
What all the works of art at the exhibition were about was the fact that they are no longer legal works.
They are a total loss.
This was precisely the title of the show Gregor Schneider had collected for the Kunstverein in 2006. Behind each artist stood tragic, comic and of course curious cases of art destruction.
Many things were ruined in the studio, like Michael Staab's work on cotton, which had been destroyed during a dispute.
Other objects were loans from private property and had suffered in the museum.
The endangered weasel, for example, belonging to Mark Dion's many-part installation "Frankenstein in the Age of Biotechnology", lost his attribution to art with his coat.
Here a single moth had done a lot of work.
HOPEFULLY WELL INSURED
If an object is damaged, which originates from a private collection and was given to a museum, this is a case for the insurance.
The art loan agreement between the lender (collector) and borrower (institution) is to be discussed, and the regulated rights and obligations of both parties.
It is usually the task of the borrower to insure the loans.
The famous "nail-to-nail" formula ensures the protection of the insurance from the moment a work is taken from a collection (suspended) to the point where it is returned to the collection.
But if the artwork is not hanging on a nail, it will be complicated.
The classic painting is easy to handle. It is more difficult in the case of works that are distributed freely in the room and / or are not made of usual materials.
There is sometimes an additional insurance. The hungry moth, for example, is considered an uncontrollable vermin. Their appearance is not foreseen in many contracts.
However, there are declarations of liability which explicitly list risks such as: mold, fermentation, odor, auto-irritation, vermin, rats or mice.
In case of doubt, the policy should be sent.
The risks to which a work of art has to be insured are just as much a question of the threat situation of the environment. In Los Angeles insurance against an earthquake is standard.
The equipment of the respective institution must also be considered.
Not every house has air-conditioned rooms. Particularly in the case of temporary exhibitions such as the ever-expanding biennials, it is often associated with buildings whose interior does not correspond to museum standards.
In certain cases, insurance will require appropriate provision by the institution. Otherwise it is up to the lender to decide whether to expose the artwork to a certain risk.
It is also difficult to control humans.
There may be theft or deliberate vandalism; human clumsiness, or over-zealous cleansing personnel that cause unintentional damage.
Corresponding references and instructions for handling or guarding more unconventional work are therefore recommended.
At exhibitions with high-caliber works, the insurance becomes a huge cost factor.
Frequently, then, the so-called "state liability" takes the place of insurance. In concrete terms, this means that in the event of damage, the state and not insurance company will cover the costs incurred.
Now it has happened. Moth, mold, cleaning accidents, malicious thieves or careless visitors have done their work. The first and most important question to ask is: is it a total loss, if so is the insurance value to be reimbursed?
(Provided, of course, the lender has taken appropriate precautions and the damage is covered by the policy.)
The insurance value is usually arrived from both borrower and lender, which is the subject of the lending contract.
The insurance value usually corresponds to the market value i.e. the sum paid to the studio, the gallery, auction price, or the current market price of similar works by the same artist.
As a rule, the insurance covers the restoration and other incidental expenses and any impairment which can only be determined after the restoration - provided that they do not exceed the initial insured value.
Then this is to be reimbursed.
If the insurance is favorable, it is restored by the hand of the (self-employed) artist or a restorer. If a photograph is damaged, the insurance will, if feasible or justifiable, insist on a new withdrawal and bear the costs for this alone.
But not every work can be restored for technical or conceptual reasons. In disputed cases, experts are consulted on what to agree on and how an artwork should be restored and whether this will lead to impairment.
Opinions can diverge so, in the worst case, such a procedure can also continue for years.
Basically, the object cannot be lent or sold during this period which can lead to noticeable financial losses. If the decision is disproportionate to the lender, he also bears the costs for the assessors.
THE CONDITIONAL REPORT
The so-called condition report is an indispensable document to help clarify the condition in which a work has been awarded.
It can be done by the collector themselves that takes time and effort and possibly a location visit, or by a conservator which costs money.
Basically, the more detailed, the better.
If high loads occur, the collector can naturally charge a rental fee
The conditional report should contain a detailed description of the work. Ideally, the object in question should be photographed. If high loads occur, the collector can naturally charge a rental fee.
The condition report is the basis for any discussion in the event of damage.
A restoration studio must be checked immediately on arrival at the destination of the art loan agreement as well as at the return on the basis of the status report. Subsequent defects are not covered.
The condition report also protects the borrower from works that are already subject to unforeseen shortcomings. So both parties are on the safe side.
PACKAGING AND TRANSPORT
Once again, for packaging and transport, there are no standards. The art forwarding agency ensures that an object is safely packaged.
Insurance usually covers only transports carried out by a certified art dealer. This means that relocation companies or (express) shipping companies are taboo.
Whoever supports an under-financed exhibition and delivers their work in the private car itself, does not necessarily do so at their own risk. Such journeys are covered in a certain way.
It looks different when you place the work in the trunk of the friend's curator.
In the case of sensitive work, the restoration is recommended by a restorer. The transport route, whether by truck, airplane or, in exceptional cases, ship, also determines the type of packaging.
In addition, certain countries have strict import regulations, such as timber. This must be done, e.g. When constructing a transport crate.
ART LOAN AGREEMENT
The art loan agreement is the mother of all loan transactions. Most houses have a standard contract, from one-page minimal text to the multi-page document.
In the case of temporary borrowing, the following should be listed:
- Contractual partner
- The institution and the lender
- The place of collection and delivery
- The exhibition title
- The duration and place of the exhibition
- The name of the artist, the work, the dating, materials, dimensions, possible signatures and labels
- Insurance value
In an art loan agreement, the borrower can specify the name of the insurance company or the transportation company.
It is also usually asked how the lender wants to be named in the catalog and in other contexts - or anonymously as a "private collection".
Usually, such an art loan agreement also contains a passage that the right of reproduction should be deemed to be granted for public relations or education purposes.
However, there may be reasons, which are in the interest of artists or collectors, to expressly prohibit these motions.
Many institutions promise explicitly in the art loan agreement that "no interventions or alterations to the work" should be undertaken.
This should be understood in of itself, but un-specificity has already led to some "change".
In order to counteract this, one should specify in the additional agreements, how the loan is to be installed.
Some artists already set this up in the purchase contract.
Therefore, anyone who purchases a video work should not assume that it can be displayed in any format. Films are often installed during the changing of major exhibitions, as the costs for transport and insurance are small.
Many institutions promise explicitly that "no interventions or alterations to the work" should be undertaken
If the artist is not consulted, the collector can act as a guarantee that the work is presented correctly.
For example, a video which is designed for a projection size of 300 x 400 cm by a high-quality projector is not to be run on a small monitor.
If a work is likely to pose a potential threat to visitors and / or other works, this should also be regulated at the agreement stage.
Working with throbbing light effects can cause health problems.
Objects may also suffer from their neighbors, e.g. a textile work that is displayed over an installation that releases liquid.
In both cases, the lender should advise the borrower of such risks so that the institution warns or acts accordingly, and the lender is thus protected from responsibility.
The fact remains that performance art as an art loan agreement is extremely rare, since they are essentially opposed to commercialization.
In most cases, the relics and / or the documentation of a performance are acquired and lent.
In performance art it is a different thing, which does not require the participation of the artist but is conceived by him.
Tino Sehgal, according to his Berlin gallery, distinguishes between the institutional and the "domestic" format, all of which are editions.
Sehgal defines the performance conditions in his work (oral) as sales contracts, whereby a work could in principle be awarded accordingly.
DIFFERENT LOAN TYPES
There are many altruistic and self-serving reasons that speak for the rental of works of art.
Especially for collectors who are at the beginning and / or act on a smaller scale, the (first) loan request can be a confirmation of their own judgment and a motivation thrust.
Anyone who earns a work of appreciation should be happy to support “their” artist in this way. The art from one's own possession is attracted by attention and by monetary appreciation.
Anyone who intends on offering a work on the secondary market within the foreseeable future is likely to be much more impressed with a prolific exhibition than the selfish collector, who wants to surround himself with art in the long run and then, repeatedly, have to separate from his artwork "roommates".
The two main borrowing formats, temporary as well as permanent loans, are associated with different benefits and risks for borrowers and lenders.
THE TEMPORARY LOAN
With the huge increase in changing exhibitions within the museums, and even beyond their walls, the demand for available works is growing.
The risks for art may be higher because of the tight budgets, the growing itineraries - the biennial system is world-wide - and the often-improvised premises mentioned above.
There are so many opportunities to appear for lenders.
However, one should also consider the fact that an artist does not actually have any influence on what is happening with his work after a sale.
Therefore, a responsible collector should not only ask whether he wants to see the acquired work and his collection in a particular context, but whether the same applies to the artist in question.
The concept of long-term lending is misleading because it suggests eternity. In fact, long-term loans are limited.
In art loan agreement talk is often spoken of 30 years - in the end, this is also the subject of negotiation, but under 20 years it is mostly not.
For a collector, the long-term loan has many handmade advantages: the artwork is provided and then insured by the borrower in the long term, and it is often scientifically processed and restored.
Whether or not, and in which contexts, it is exhibited is also to be discussed between the contract partners.
Some permanent loans are handed over by the collector only under certain conditions, other collectors leave the institution free to use as they wish.
In either case, it is recommended that both parties verbalize their unspoken expectations. Dislikes are otherwise pre-programmed.
When Peter Ludwig sold a collection of 144 illuminated manuscripts from the 7th to the 16th century to the Getty Museum in Malibu, California, in 1983, the annoyance was great.
The Cologne Museum had the manuscripts in the form of a permanent loan for years, scientifically researched and well documented.
For this the taxes, the revenue and, above all, the surplus-value which resulted from this artistic-historical effort had fallen to the collector.
The documents had never been legally binding on the museum in Cologne as Gerda Ridler collected in private.
Fixed assets also have permanent advantages when it comes to the issue of inheritance tax.
Works which are held as permanent debts in a public institution are taxed at a lower rate in the case of inheritance, or under certain conditions no tax at all.
This is subject to conditions, such as a 10 year sale lock-off, otherwise a proportional tax will be levied retrospectively.
In this case, legal advice should always be sought.
The topic of art foundations is always polarizing, whether it is a collector, an artist or an inheritance.
At the moment, the planned reform of the Act on Cultural Protection is causing great unrest, as museum collections are to be "collectively under export protection".
This is, however, only for stocks and not for loans.
Obviously, lenders should be able to decide whether their works are regarded as a national cultural asset or not through an "opt-out clause".
However, with the termination of the art loan agreement, the special protection for national cultural property will end automatically, so that the collector can freely dispose of his work.
In recent years, the relationship between the public institutions and the large private collections has changed.
Many institutions continue to benefit from significant loans. To give individual works in public hands, on the other hand, has become much more difficult and highly context-dependent.
A work should complement a collection meaningfully or close painful gaps. In fact, some private collectors would have much stricter provisions than public institutions over the course of their profession.
At the same time, the pressure is on the institutions to compete with the splendor that some private collections promise.
And although many museums have relatively ridiculous purchase budgets, they are not often used due to concerns about public surplus value.
And the public expenses for storage, insurance and restoration must also be considered.
As a collector, one should therefore not speculate that the responsibility and care for the acquired art can be transferred to a museum.
Nevertheless, it can be useful to offer a public museum work from the private collection, since not every collection is made known.
And, of course, there are no lists of what works are in which hands.
A museum may be grateful for information and supplementation of its collections.
Especially with contemporary art, and especially with an art loan agreement, the request usually comes from the curator or the institution: after all, one can ask artists or galleries about the whereabouts of the works.