By Barry Skidelsky, Esq.
Barry Skidelsky, a former EASL Chair, is a NYC based attorney and consultant with a diverse practice focused on entertainment and media. He particularly enjoys helping creative talent of all types.
In service to my fellow EASL colleagues who may also represent players in the NYC art world, here is a brief note with some related thoughts on what seems to be a largely overlooked law change (effective June 15, 2022) concerning long standing auction regulations and practices.
Whether the change was necessary and will have positive or negative effects for art market participants (e.g., artists, galleries, auction houses, collectors, and financiers), and for our government, is up for debate.
NYC Local Law 80 (https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=4805925&GUID=2C7D9F71-D49E-499E-A21F-F6A9D5C76B90&Options=ID|Text|&Search), a "regulatory streamlining" enacted last summer by the NYC Council, in part repeals portions of NYC Administrative Code title 20 (consumer protection), chapter 2 (licensing), subchapter 14 (auctioneers).
In essence, this law repeals the requirement for auction houses to have a license from the city in order to operate in what many consider to be the art world's number one market; and, it eliminates or loosens some rules about information auction houses have been obligated to disclose to bidders and buyers.
For example, an auction house will no longer have to identify when it or a third party has a financial interest in a particular lot. It will also now have more freedom regarding the relationship between estimates and reserves (i.e., the minimum price that a consigner is willing to accept). Other rules that are relaxed concern so-called "chandelier bidding", when the auctioneer creates the appearance of demand by pretending to accept a bid that is not real until the reserve price is met.
The art world has long been viewed by many as opaque and it is hard to predict how eliminating required licensing of and disclosures by auctioneers will protect transparency among other interests of art market participants, or how it may impact government interests in fighting money laundering and terror finance through trade in works of art and other collectibles.
For an interesting read about that last subject, I refer you to the US Treasury's February 2022 Report, at https://home.treasury.gov/news/press-releases/jy0588; or, if you prefer, the movie The Accountant.
Comments