A few people have requested additional information on the Personal Properties Securities Act and what this means to artists submitting works for exhibition and sale through a gallery or dealer. The following notice is from the March 2012 NAVA News eBulletin! This is important stuff for all artists.
THE NOTICE
The Personal Properties Securities Act and its serious impact on artists
As you may have heard, under new laws, artists must register their relationship with any gallery which is taking their works on consignment, in order to avoid losing out if the gallery goes under.
Previously, with art works on consignment, these works were not seen to be part of the gallery’s assets if the gallery became insolvent and went into liquidation and thus they escaped the reach of the liquidator and were returned to the artist.
Under the new Personal Properties Securities Act, works on consignment at a gallery are considered to be part of that gallery’s collateral or its security interests and will be seized as part of the gallery’s assets if the gallery goes into liquidation.
In order for artists to protect their property and prevent it from being seized they must do three things:
i) register every gallery where they have works on consignment with the newly created Personal Properties Securities Register (PPSR), an electronic register established as part of the Act which can be found at http://www.ppsr.gov.au/ This will cost $7.50 per gallery and will last for 7 years, after which the registration will need to be renewed;
ii) keep absolutely up to date inventories of works left on consignment with any gallery, signed by both the artist and the gallery, and keep a copy;
iii) to help avoid losing payment for works that have been sold but for which artists have not been paid, they need to verify that any gallery representing them has proper recording, accounting and reporting processes in place. They must request to be sent a statement of accounts very regularly.