Auctions Are Run By Humans With the Best Intentions in the World
Any auction will tell you in private that the job they do is impossible at times, given the shortness of time, the pressure to sell for the sellers and the main aim of auctions, to make some money for their owners or shareholders. All these together create a really tough environment to operate in and keep your sanity to the full. It is a crazy world at times and this is more so when the items for sale is seemingly of low value, low hundeds or a few thousand at the highest.
My Blog this evening is all about Opportunities at Auction and what has happened to me on so many occasions. This new area of business will take me two or three entries at least.
Follow my Blog this evening!
7th August 2015
Miscatalogued by one Auction, correctly catalogued at Bonhams
It is October 2002 and the Greek art market is coming of age with prices picking up fast. Would there be a miscatalogued Greek painting in a Sotheby’s catalogue? Well, one would argue no, as my experience says that now two or three experts usually accept consignments and make decisions over cataloguing.
(Greek, [1859-1925] Well-known and well-respected marine artist who is in most Greek collections of renown. Auction price range £2000 – 50,000)
15th October 2002, Sotheby’s London, Lot 54 – 16th December 2003, Bonhams, London, Lot 15
I have had the opportunity to sell Prosalentis’ work successfully and at Sotheby’s too. Most of his work is marine art in oils and watercolours with a signature easy to read. The watercolour in the Sotheby’s sale of 15th October 2002 was catalogued as by another Prosalentis, Spyros Prosalentis, although for me it was signed clearly in Greek A. Prosalentis. On the day, it sold to me for £650. I was very happy to buy the miscatalogued watercolour. I was more than sure it was worth at least double the amount I had paid.
· Did the vendor know that his property was miscatalogued and it sold well below its real auction value?
· Did the vendor know that she/he was entitled to compensation for that error?
· Did the vendor know that the buyer, myself, resold the piece, this time correctly catalogued at Bonhams, a year later for £2200?
Needless to say, I never informed Sotheby’s about their mistake, which I am sure they spotted when Bonhams resold the watercolour, but I wonder whether they compensated the original owner of the Prosalentis. How is a layperson to know about all these issues and what to do in cases such as these?
The above stories involved small sums of money but much bigger sums are at play frequently. Reading this diary might save you money. A knowledgeable advisor can also help an investor who knows very little about how the auctions and the art market works. Asking for independent advice is always a good idea either you buy or sell!
An auction refuses to reverse a sale and reimburse! What can I do?
Laws, rules and regulations govern the auction business in any country or state in the developed world. Auctions state clearly in their catalogues conditions of sale, which any buyer or seller should read closely and be well acquainted with. The law is the law and ought to be applied regardless of financial gain or loss.
What are these fundamental conditions, rules and regulations that make the contracts between buyers and sellers binding and extremely important?
· The auction acts as agents they state, but they are responsible for the items they sell, not the vendor. The buyer knows the auction by contract; the auction knows the vendor by contract. That does not mean that the buyer is contracted with the original vendor.
· If an auction accepts a fake, a copy or makes a mistake in the description of any item sold, they are responsible for that description, not the original vendor. That is the reason why auctions are so careful in how they describe items for sale.
· When an auction describes any work of art wrongly and that is proven by expertise or scientifically, then the auction is obliged by law to reverse the sale, thus returning the purchaser all the amount paid at contract point, but not any expenses incurred in the meantime. Whether the auction will be able to collect their money from the original vendor is another matter for them to sort out.
· The period of guarantee of authenticity varies from five years to a few days, a fact clearly stated in the conditions of sale of all auctions, small or major. Please have that in mind when you invest at auction.
In all the cases where I have bought fakes, wrongly described paintings or indeed stolen paintings, I have had no trouble collecting my money under the guarantees of the auction concerned. Small cases are generally settled amicably and as described without much trouble.
However, when the money in question is in the millions, auctions tend to prevaricate and procrastinate, tend to find this and that excuse or reason for refusing to satisfy the claim. In cases such as these, the legal route is the only way forward. Even though the legal route is expensive, it is generally successful and advisable but one has to be prepared to loose a lot of money in any litigation.