Art Market Professionals

For Art market professionals

• AMPs have differing costs associated with resales.  Is it fair that AMP’s costs aren’t factored into the calculation of the royalty

  Art market professional’s concerned about whether the royalty accounts for differing AMP costs should note that the royalty is calculated exclusive of (i.e. disregards) any costs associated with the resale.   

  This leaves it up to the art market professional, the buyer, and the seller, to freely agree their costs, premiums, commissions etc and determine what is, in their particular circumstances, fair and lawful between them.   
  
  It is not the purpose or function of the legislation to presume, dictate, or discriminate those private commercial arrangements.  Instead, the legislation creates a predictable royalty by using a fixed percentage of the resale value.  This is the same for every qualifying resale, and every liable AMP. 

  This creates benefits to art market professional and artists alike.  Negotiation, custom, and freedom of contract, will determine fairness between parties to the resale contract as to their own costs, premiums etc.  And whatever they freely decide about those (and however that varies case-by-case), won’t prejudice or affect the “resale value” or the royalty total, which also ensures transparency and fairness to the artist.

• Can the Auction House put a fee on top of the sale to cover that 5%? Is it on the hammer price? 

  The resale royalty payable is calculated at 5% of the “resale value” of the qualifying resale (section 16).

  Section 10 says that “resale value” means: “the value of the consideration given for the visual artwork under the contract for resale”. 

  This may include:

  • the amount paid in New Zealand dollars;  
  • the value of goods and/or services paid in kind;  
  • (if paid in another currency), the amount converted to NZD at the date of payment.   

  It does not include:

  • goods and services tax (GST); or
  • duties, levies, or taxes (etc) under the Customs and Excise Act 2018; or
  • “any costs associated with the resale, for example, a commission or a buyer’s premium” 

  So, the Auction House / Art Market Professional’s fees would be a cost or premium or commission associated with the resale, and are therefore excluded from the calculation of “resale value” or the royalty. 

  Auction Houses and other Art Market Professional’s must be cognisant of other rules in the Act that prohibit waiving, charging, repaying or sharing the royalty: 

  • An artist cannot ‘alienate’ their royalty right during their lifetime (s 13).  This means an artist cannot lose, sell, license, assign, charge, or waive their resale right during their lifetime, and any agreement to do so is void (s 13(2)). 
  • Any agreement to repay the resale royalty is void (s 17(5)), as is any agreement to share the royalty (except where the Act provides that a royalty can be held in shares e.g. where there are joint artists (s 12), or multiple successors (s 14(4)). 

• Do we report the resale if we don’t know the name of the artist or maker?

  Yes, even if you do not know the artist or makers name(s) we kindly ask that you report all qualifying resales to us. Please provide any information you can about the works origins (if known). RRA’s role is then to determine if the resale is eligible for a royalty or not and will accept or decline the report and update you accordingly.

• How does the scheme affect Art Market Professionals?

  There are legal obligations for Art Market Professions which require them to:

  • report qualifying resales of original visual artworks to RRA; and
  • pay to RRA* the resale royalty payable in respect of each qualifying resale.  The seller is also jointly & severally liable for payment.  

  These are explained in our Guide: Information for Art Market Professionals.

  Please register to stay informed about your obligations under the scheme, and to receive administrative support with compliance.

  (*This assumes the Art Market Professional is acting as agent for the seller on a resale.   In cases where there is no agent for the seller, then instead the buyer’s agent or the buyer will be jointly liable with the seller to make paymen

• I’m not sure the resale qualifies, do I still report it?

  In the first instance, please see our step-by-step flowchart under the ‘Criteria’ section on our Homepage here.  If you are still unsure, contact us.

• Is there any process we should follow to determine whether a sufficiently “limited number of copies” of a item exist to determine whether the work is an original visual artwork or not?

  If copies are not numbered as with a limited edition print, and there is no other information available to help ascertain how many copies have been made, then you can possibly assume it is not a sufficiently limited number and therefore not a qualifying resale.  The Act does not define what a limited number of copies is, although there is provision in the Copyright Act that a 3 Dimensional artwork that has fewer than 50 copies produced is copyright protectable, so this might be a useful benchmark. We suggest using good faith best efforts to do your due diligence in researching, and keep a record of your research in case it is needed at a future date.  If you have any concerns or want to discuss then please just get in touch with us. 

• What do I need to do as an Art Market Professional?

  Art Market Professionals:

  • Art Market professionals have certain obligations and liabilities under the Scheme.  These are explained in our Guide: Information for Art Market Professionals. 
  • Please register to stay informed about your obligations under the scheme, and to receive administrative support with compliance.

• Who is an Art Market Professional?

  The Act defines “Art Market Professionals” in section 11 as:

  (a) a person who carries on business as an auctioneer (within the meaning of section 5(3) of the Auctioneers Act 2013):

  (b) an art dealer:

  (c) an art consultant:

  (d) the owner or operator of an art gallery that deals in visual artworks:

  (e) any other person who is in the business of dealing in visual artworks.