RESALE RIGHTS OF ARTISTS
Graphic and visual artists (e.g., painters, photographers, etc.) are entitled to a “resale right fee” when their works are resold by art trade professionals (e.g., via a gallery, an antique dealer or an auction). This concerns a “resale” of the work of art, i.e., not the first sale by the artist himself, but a subsequent sale. The intention is to allow the artist to benefit from later increases in the price of his works. This article discusses how the resale right is organised in practice (in Belgium).
Resale right for art: declaration and payments
Resale right for art: unique platform
Art market professionals who are involved in the resale of a work of art (as buyer, seller or intermediary) are obliged to report the resale to the unique platform www.resaleright.be, and to pay the “resale right fee” via this platform. This platform was created by the Belgian copyright management companies Sabam and Sofam.
The use of this platform is compulsory for all resales in Belgium. The artist cannot claim a fee for the resale right directly from the reseller. He must always use the unique platform for this. Also, the professional reseller or a work of art cannot circumvent the platform by paying the artist directly. He will always have to report the resale and pay the resale fees via the platform. Foreign artists (or their heirs) must also use the unique platform in the event of the resale of works of art in Belgium.
This use of a central contact point is a good initiative, as it offers more guarantees for the effective payment of the resale fees.
Resale right for art: affiliation with Sabam or Sofam?
If the artist is affiliated with a collective management organisation such as Sabam or Sofam, then this organisation will take the necessary steps to pay the resale right remuneration to the artist. The artist himself does not have to check the platform to know whether there has been a resale or not. The platform itself will pass the resale right compensation received to the collective management organisation, which will in turn pay the resale right to the artist.
If the artist is not affiliated with a collective management organisation (such as Sabam or Sofam), then it is the artist himself who has to claim the resale right fee via the unique platform. Therefore, it is recommended for these artists to check the website of the unique platform regularly. An artist can register himself in advance (before the resale takes place) via the platform, so that the platform itself can contact the artist in the event of a resale. Note that the unique platform charges higher fees to artists who are not members of the collective management organisations.
Resale right: art sold at public auction
For resales that take place at public auctions, the art market professionals who are involved in the resale as seller, buyer or intermediary, the public official (bailiff or notary), and the seller are jointly and severally obliged to notify the resale to the unique platform, within one month of the sale of the artwork (they must declare the name of the artist, the title of the work of art, the date of the sale and the sales price, among other things). They are also jointly and severally obliged to pay the “resale right fees” within two months of the declaration via the unique platform. In practice, the unique platform will calculate the resale right fee and draw up an invoice.
Resale right: art not sold via auction
For resales of art which do not take place in the framework of a public auction (e.g., via an art gallery, antique dealer, art intermediary, etc.), the parties involved in the resale as seller, buyer or intermediary and the seller are jointly and severally obliged to notify the unique platform of the resale of the work of art within three months (and at the latest the 20th day after each calendar quarter) (reporting the same data as listed above for auction sales). They are also jointly and severally liable to pay the resale right fees within two months of the declaration via the unique platform (the platform will prepare an invoice).
Resale right for art: up to five years after sale
The artist can assert his resale rights within a period of five years from the date of the resale of the work of art. After five years, the artist’s resale rights will expire. In other words: if the artist is not a member of a collective management organisation, cannot be identified by the unique platform and does not contact the platform himself, Sabam and Sofam will distribute the unclaimed resale right remunerations among their members.
Up to three years after the resale of the work of art, the unique platform can request all information from the art trade professionals involved in the resale of the work of art. The unique platform can also request this information about artists who are not members of Sabam or Sofam.
Resale right: conditions and modalities
Resale right: original work of graphic or visual art
The artwork must be an “original work of graphic or visual art”, such as images, collages, paintings, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramic works, glassware and photographs.
The work of art must also be original within the meaning of copyright legislation. Indeed, the resale right is a component of copyright (this means that the other characteristics of copyright also apply to the resale right, notably as regards its duration).
Certain works of art do not fall under the resale right because they are not works of graphic or visual art. For example, the resale right does not apply to musical works, films, architecture, etc.
Copies of works of art produced by the artist himself (or on his instructions) in a limited edition also fall under the resale right. The question is what exactly is meant by a “limited edition”. In practice, it usually concerns copies that are numbered or signed by the artist (such as engravings or etchings that are numbered or reproductions that have been provided with a signature of the artist). However, copies that are made after the death of the artist do not fall under the resale right, even if they are made in a limited edition.
Resale right: “resale” of the work of art
It must concern the “resale” of a work of art. If the artist himself sells or gives away his work of art, then no payment is due under the resale right. If the person acquiring the work of art subsequently sells it on, then the resale right will not apply. After all, the resale right only applies to a sale after the first transfer by the author (this first transfer can also be a gift or an inheritance).
Resale right: art market professionals
Professional from the art trade must be involved in the resale as seller, buyer or intermediary. Examples are an auction house, an art gallery, an antique dealer, etc.
The resale right does not apply to a sale between a private seller and a private buyer of art (these are not “professionals” from the art market or art trade). Nor does the resale right apply in case of:
- A sale by a private individual to a museum that is non-profit-making and open to the public;
- A public sale following a bankruptcy;
- The agreement between an art gallery and an artist whereby the latter may exhibit his/her artwork in return for a percentage of the sales price if the work is sold. In such a case, only a (first) transfer takes place between the artist and the buyer, not between the artist and the gallery.
No resale right for promotional sales
The resale right does not apply to resales where the seller obtained the work of art directly from the artist less than three years prior to the resale and where the resale price is limited to €10,000. It is up to the seller to prove that this exception applies. This often concerns artists at the start of their career, whose works were purchased directly from the artist by the seller – for example a gallery (so-called “promotional sales”). It is compulsory to declare such sales or art if they take place outside a public auction, but no payment of resale rights will be due.
Right of resale also for foreigners?
Subjects of EU or EEA member states can claim compensation for the resale of their works of art in Belgium under the Belgian resale right. Nationals of other countries (not EU or EEA countries) can only claim resale right compensations in Belgium if the legislation of their country grants a comparable resale right to Belgian citizens (reciprocity requirement). If they have their residence in Belgium, they can in any case claim the resale right.
What about public sales abroad? Sabam and Sofam have concluded reciprocal contracts with copyright management companies in other countries. As a result, Belgian artists can, in principle, claim resale right compensations for sales in these countries.
No renunciation of resale right possible
The resale right is an inalienable right. The resale right cannot be transferred, nor can it be waived (not even in an agreement: such a clause is considered invalid). However, an artist may transfer his or her resale right by way of a will.
Duration of the resale right
In principle, the resale right applies until 70 years after the death of the artist (the resale right follows the duration of copyright). However, there are some exceptions:
- If the work of art has been created by two or more authors, the resale right remains valid until 70 years after the death of the longest living artist.
- In the case of an anonymous or pseudonymous artwork of which the author cannot be identified, the resale right will last until 70 years after the work has been made public (in a lawful manner). If the artist makes himself known within that period, his copyright (including the resale right) continues to apply until 70 years after his death.
In any case, after the artist’s death, the resale right shall vest in his or her heirs (and other successors in title).
Resale right: calculation of fees
The fees for resale right are calculated on the resale price (excluding tax) of the work of art, provided it is at least €2,000. This amount therefore serves as a minimum threshold: if a work of art is sold for a lower price, no compensation for resale rights will be due.
This sale price is the price paid by the buyer, excluding taxes (such as VAT) and including any fees or expenses of intermediaries.
The compensation for the resale right is calculated in instalments:
- 4% of the part of the sales price up to and including € 50,000;
- 3% of the part of the sales price from € 50,000.01 up to and including € 200,000;
- 1% of the part of the sales price from €200,000.01 up to and including € 350,000;
- 5% of the part of the sales price from €350,000.01 up to and including €500,000;
- 25% of the part of the sales price exceeding €500,000.
The compensation for the resale right is in any case limited to a maximum amount of €12,500.
Under Belgian law, the rate of the first scale (4%) must be applied to the whole resale price up to €50,000, so also to the first €2,000 (despite the minimum threshold). It is possible that this rule is not in accordance with European law.
Incidentally, this rule also seems to apply in other countries. For example, it also applies in the United Kingdom (the major art auction houses are located in London). The same percentages and the same maximum amount apply in the various EU Member States. However, the minimum thresholds may differ. For example, in the UK, the resale right applies from a sales price equal to the sterling equivalent of €1,000. It remains to be seen how this will evolve after Brexit. In the Netherlands, the minimum threshold is €3,000. In France, compensation is already mandatory from a sales price of €750.
These amounts apply per work of art. This means that works of graphic art or visual art which are eligible for the resale right may not actually be sold in lots (since this would make it impossible to calculate the correct price per work of art).
Resale right: sanctions
If a professional active in the art trade intentionally prevents or impedes the exercise of the right to information, he can be punished with a criminal fine of €26 to €25,000. These fines apply, among other things, in the event of a refusal to provide information or documents or if incorrect data is knowingly and intentionally communicated. These fines also apply in the case of false declarations.
The unique platform charges additional administrative costs when notification of the resale is made outside the legal sale (10% on the resale right due) and when no notification is made (20% on the resale right due).
Do not hesitate to contact us for further questions about resale rights. We will be happy to help you (as an artist or as a professional in the art trade) with any questions or discussions regarding resale rights of pieces of art).
Author: Bart Van Besien