Art Preservation
There are multiple risks directly associated with owning and investing in contemporary artwork. However, most of these risks can be reduced through proper care of the artwork. Furthermore, other works might require you to engage the services of experienced art professionals.
Following is an inventory of the primary precautionary measures an art buyer/collector/investor must consider and appropriately implement to ensure that artwork is preserved in order to perennially enjoy its aesthetic and other intrinsic qualities while making sure that it does not lose value over time.
1: frequently get the artwork appraised
Since the value of contemporary artwork is related to timing and other macro factors e.g. the global economy and the changing trends and tastes in different artistic genres, it also implies that the artwork can sell for different values at different times. Therefore, after purchasing a contemporary artwork, it is imperative to understand what you own and how much it is worth, and to update that knowledge periodically.
Some reputable galleries, e.g. Seed Gallery, will send you periodic appraisal reports, on how the artist’s work (in this case, Nya′) is doing on the global art market, and an estimate of how much you will likely be offered should you decide to put the work on the secondary art market.
However, this is not the case with most galleries and other art vendors. Therefore, in addition to following the advice regarding art buying (see buying contemporary art), it will be sagacious to engage the services of an independent appraiser who will update you regularly on the current market value of your investment.
It is important to know that there are a number of issues involved in evaluating the prices and value of contemporary artwork on the global art market. And an astute appraiser who is well informed and versed with timely information will be able to use available quantitative assessment methods to compile indices that will help you ascertain the current value of your work(s) and/or overall collection.
A quality report regarding your purchased artwork(s) will or must give you information which includes the following;
a: A summarized description of each work(s) sold and their overall condition
b: A list of the artist’ work(s) that are currently on the market and where there are being sold
c: The titles, sizes and images of the work(s) sold by the artist after you purchased your painting(s)
d: The price each work was sold for and the name of each collector or institution that bought the work(s)
e: If the work was sold at auction, a list of other works in the same genre sold and the prices realized
Conclusively, a professionally conducted appraisal by an independent, impartial and objective expert who specializes in the genre of the contemporary artwork(s) you own will be extremely important in assigning value to your artwork while helping you to avoid a litany of problems that usually arise when value is not established.
REDEEMER OF DREAMS
Series I: Divine Inspiration
Oil, cow dung, animal hide, metal, earth, electrical wire, denim, butt hinges, foam board, debris remnants of a suitcase, zip on canvas
41 x 31 inches (104.14 x 78.74 cm)
2004
© Nya′ 2008. Courtesy of Seed Gallery, New York
Photo by House of Seed Photography, New York
PROVENANCE
Year of completion: 2004
Artist Private Collection: 2004 – 2006
Seed Gallery Private Collection: 2006 – To date
History of Exhibitions:
HE HIDES HIS PERFECT GIFTS IN FLAWED VESSELS SO THAT EVIL MAN WON’T SEE
THURSDAY, SEPTEMBER 04, 2014
SEED GALLERY, NEW YORK
WORK: THE ONLY VEHICLE THAT MANIFESTS GOD’S WILL ON EARTH
THURSDAY, SEPTEMBER 05, 2019
SEED GALLERY, NEW YORK
2: insure the artwork
A contemporary artwork that has been lost, damaged or stolen is irreplaceable. Nevertheless, it is possible to protect the financial value of the artwork through adequate insurance.
It is important to insure your artwork against the risks (see risks involved when investing in contemporary art) associated with acquiring contemporary art, while simultaneously covering any other costs for maintenance, repairs and restoration. When artwork is insured, the investor or collector will be reimbursed a financial equivalent of the loss to damaged artwork that will be very difficult or even impossible to replace.
Therefore, in order to preserve your investment, you must choose a professional and experienced art insurer who will listen to your needs and make every effort to work with you regarding your preferences should and when a claim occurs.
Primarily, an art buyer/collector/investor has five types of art insurance that he can choose.
a: total coverage insurance
As the name suggests, this is insurance coverage that will reimburse you financially for the loss of or loss in value to the artwork. For example, if you lose a work currently valued on the art market at US$35,000, total coverage insurance will reimburse you the exact amount.
However, it is important to understand what the insurer considers as “loss.” For example, in specific cities across the United States, damages or loss to artwork caused by wind, fire or earthquakes are not covered.
Other insurance companies assign flood–specific deductibles and premiums that are higher for theft and other losses. For example, you could have US$1 million of all-peril insurance, but only US$250,000 for a flood. Some insurers have clauses stating that all artworks should be stored or displayed at least five feet off the ground and pieces stored in windowless basements without access to natural air are not covered.
b: replacement of artwork insurance
This insurance policy will assist you in finding and acquiring a contemporary artwork that is similar to the one you would have lost. For example, if you lose a work (photography) by the late Seydou Keita, Mali (1921 – 2001), it can be replaced by a work from the same genre and of similar value from an artist of equal importance e.g. Malick Sidibé, Mali, (1935 – 2016).
Distinguished works with an esteemed provenance and an ‘iconic status’ will be arduous to replace and there is no guarantee that the replacement will offer equal returns on the secondary art market e.g. “The World Map,” a sculpture by El Anatsui (Ghana) and the painting “Vision of the Tomb” by Ibrahim El Salahi (Sudan).
c: agreed value policy insurance
An Agreed-Value Policy (AVP) insurance is designed to give the insurer faster claims settlement. However, with this type of insurance, the insurer has to agree to the value of the artwork prior to the loss, and it is, therefore, much more suitable for an investor with a sizeable number of artworks.
For example, a collector can estimate, through the aid of reputable art appraisers that his collection of 150 paintings, including rare pieces from revered artists like Susana Solano (Spain), Zwelethu Mthethwa (South Africa), Kerry James Marshall (USA), Ai Weiwei (China), and Alexander “Skunder” Boghossian (Ethiopia) is valued at US$2,6 million. It therefore implies that should the collector lose their entire collection, only the pre-stated value of the collection will be reimbursed.
In the case of losing some pieces from the collection, the amount of money reimbursed will be calculated according to the overall pre-stated value of the collection.
However, since the value of the work/collection is pre-determined, it means that the collector loses out on any gains the work/collection would have accrued, a major downside if the collection has works by auction houses favourites like Marlene Dumas (South Africa), Cy Twombly (USA) and the renowned German painter, Gerhard Richter.
d: current market value insurance
Another type of insurance a buyer/collector/investor can choose is the current market value (CMV) insurance capped at 150% of the stated value of the policy for each individual artwork. For example, if you lose a watercolor x-ray by Nya’ for his work “Keeper of Time” with a stated value of US$2,000, it, therefore, implies that even though the current market value of the drawing is US$15,000 the collector will only receive $3,000, a 150% cap from the original value.
e: title insurance
For a long time, collectors had little in the way of assurance that they were protected from claims against an artwork's ownership, other than due diligence before purchasing. However, as the art industry continues to grow globally, a form of insurance that has become an increasingly popular way of assuring that art ownership can be protected from theft claims is title insurance.
For a premium of between 1 and 5 percent (or higher, especially for works considered rare and valuable), title insurance will cover legal costs if a title dispute occurs and reimburses the buyer/collector/investor for the value of the work if you lose ownership. However, title insurance policies are expensive, but in absolute terms, they represent only a fraction of other fees associated with art purchases, such as shipping and handling, property insurance and the infamous 12-25 percent buyer's premiums charged by major auction houses like Sotheby’s and Christies.
Furthermore, title insurance does not protect against everything. It might be ideal for art lenders, e.g. (banks, art and hedge funds) who, many times are giving money against collections of rare art pieces valued in the tens of millions of dollars, and don't want to risk their money if there is any question in terms of ownership or authenticity.
However, unlike real estate, (where the concept of title insurance was adopted) and when there can be no question of where the land came from, art title insurance can only protect a collector against claims of ownership, it cannot protect against claims of authenticity.
Conclusively, it is important to underscore that the valuation clause of the policies explained above will legibly disclose what you will receive as a policyholder in the event of a loss or damage while specifying exactly how the insurer will make the payment. Prior to deciding on which policy will be best for your artwork(s) or collection, it is wise to consult a reputable art advisor to help you choose the best policy that will protect the overall value of your investment while protecting its financial value in the case of loss or damage.
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Keeper of Time X-Ray 52 | ©Nya’ 2014-2017. Courtesy of Seed Gallery, New York
keeper of time. x-ray 52
3. protect the artwork against physical damage
After you have invested in contemporary artwork, it is your responsibility as an investor or collector to ensure that it remains undamaged or does not disintegrate over time. Even though some risks such as accidental damages and breakages can be unavoidable, there are a number of avoidable risks. For example, to prevent a painting on canvas from dimpling, avoid digging your fingers into the canvas, resting or leaning any object on the canvas/frame and when carrying artwork, hold it from the sides of the stretcher bars (frame), preferably wearing soft gloves.
To protect artwork, particularly paintings from dust and moisture, make sure that the piece is hung at least one and a half feet (28 inches or 45.7 cm) from the ground. Furthermore, to prevent canvas stretchers from warping, display artwork in a humidity-free environment. However, astute preservation begins by requesting a condition of artwork report from the vendor and monitoring your investment regularly to identify existing problems before they escalate and potential problems before they occur.
For example, if the report states that on the bottom left corner of the canvas, above the artist's signature, there are slight cracks showing - this might require you to send the painting for early restoration before the cracks widen.
Once your artwork is in your possession, it will be wise to engage the services of a knowledgeable art conservator who will in turn use the condition of artwork report as a guide to physically assess the artwork by carefully looking at the following;
a: The structure supporting the artwork, e.g. stretcher bars, wooden board, canvas, plywood, parchment etc.
b: The materials used by the artist to create the artwork, e.g. type of paints, wood, paper, each found object etc.
c: Identify signs of deterioration or damage in the artwork, e.g. cracking or peeling paint, warped canvas, fading color, disappearing signature etc...
The art conservator will also furnish the art buyer/collector/investor with important advice concerning the following;
a: How to protect the artwork from humidity, mold, insects, termites, rodents etc.
In the case of a collection, he will clearly single out works that might need careful or immediate attention.
b: How to physically handle the artwork e.g. storage, transportation, packaging, lighting and displaying the artwork.
For example, Nya’s work behind custom museum glass tends to fog over time if it is displayed in a room with limited air circulation whereas his larger works on canvas are highly durable and resistant to humidity.
The art conservator will also evaluate the need for any professional treatment that will support the structure of the artwork or improve its appearance without altering the artist’s original intent. For example, the combination of textured relief and found objects in distinguished works by Nya’ e.g. (“Epistle of Breath”) means that it is wise to invest in a quality dust blower to prevent dust particles from settling within the folded regions of the texture.
Whether you are acquiring contemporary art as part of your investment portfolio, thus primarily concerned with its promised value, or purely for sentimental and aesthetic reasons; the professional and timely advice of a skilled, experienced and knowledgeable art conservator will preserve your investment while helping to maintain and grow its value over time.
Epistle of Breath
4: keep the documents in a safe place
Along with your investment will be a number of important documents related to the artwork. Even though it is largely dependent on the vendor, a reputable gallery that is professional, passionate and serious about the artist they represent will include the following documents with the artwork;
a: Provenance report
b: Condition of artwork report
c: Any other news related to the artist
d: Original invoice with the gallery’s logo
e: Previous and future press clippings about the artist
f: Previous and future auction results of the artist’s work
g: Previous and future press releases of the artist’s exhibitions
h: Previous and future catalogue(s) of the artist’s work signed by the artist
i: Detailed biography and bibliography of the artist especially printed for the collector
j: Original certificate of authenticity with the artist’s signature i.e. if they are still alive
k: Previous and future brochures, pamphlets, and other promotional material of the artist’s work
In the case that the artist whose work the gallery sold has moved on and is now represented by a different gallery, a reputable gallery will still make sure that the collector is furnished with all the above information.
It is important to make sure that all the above documents are kept in a safe place. Furthermore, any other correspondence that might have taken place between you and the artist, e.g. a photograph with them, a signed letter, an autographed book etc... should all be kept safely together with the other documents.
5: immediately include the artwork in your will
Whether your reasons for acquiring a contemporary artwork are driven by a desire to realize short-term financial gains or there are purely sentimental, it is wise to make sure that your investment is immediately included in your will after purchase.
With regards to the artwork, these two important elements should be included in the will:
a: the name of the entity to own the work upon your demise.
Clearly noting down the name of the person, group or organization (beneficiary) you want to have ownership of the artwork after you die. It can be a family member, museum, private or public collection.
Illustrious collectors who left instructions on where they wanted their collections to be housed included notable American industrialists of the 20th century like Henry Clay Frick, J. Pierpont Morgan, Nelson Aldrich Rockefeller and the founder of the National Gallery of Art in Washington DC, Andrew William Mellon.
As a matter of fact, the majority of museums in America, and arguably in Europe and now China, were built by dedicated, astute and intention-driven collectors who had an unyielding desire to share their vast collections with the community at large while branding their cities and country.
Even though he was not a collector, (at least of other artists’ works) a powerful example of the importance of a will is the American painter, Clyfford Still (1904 – 1980). Before he died, he left clear instructions in his will stating that his collection of works was to be housed in a museum solely dedicated to his art. The American city that won the collection would be required to maintain it permanently and could not sell, trade or give away any of the pieces.
After his death in 1980, his wife, Patricia, selected Denver as the winner and on November 19, 2011, The Clyfford Still Museum was opened.
b: what you want the beneficiary to do with the artwork.
The will should also state what you want the beneficiary to do with the artwork after you die.
For example, you can state that you want the entire collection or a certain piece(s) to be permanently displayed in a specific museum. However, this will depend on among other things, the importance of the piece or collection, the artist's notoriety and oeuvre and or the collectors’ pedigree.
The will can also state that you want the collection/piece sold at an opportune time or retained as a family treasure.
In the case of a large body of works, it will be important to compile a detailed list of each artwork and write a clear letter indicating which artwork you want to leave to which beneficiary. Make sure that your intentions are very transparent and lack any ambiguity. The clearer you can make your intentions, the better.
One copy of the will should be stored with your other documents related to the artwork/collection while other copies are retained with your lawyer, trust fund manager and/or wife. It is also imperative to make sure that your signature is on every page of the will.
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