Built in the 1940s, the coral stone-clad main house has been reconstructed and measures about 62,200 square feet, said Mr. D’Angelo. The oceanfront house is connected to guest quarters known as the Ficus Wing, which sits on the Intracoastal, by a tunnel that runs underneath the road bisecting the property. The tunnel is air-conditioned and furnished as a living room, with a fireplace and skylights, according to Rick Moeser, senior vice president and regional manager of Christie’s.
2. NEW YORK If you have your eye on a piece of fine art, don’t be surprised if you have to do more than just write a check to purchase it: The gallery offering the piece may also want you to agree in writing not to resell the work at auction—or even to another collector—without getting their permission first.
Adding conditions and restrictions to sales agreements is becoming an increasingly common practice in the art world as dealers, worried that an overheated art-auction market is distorting prices, look to maintain control over who buys the works of the artists they represent. “There is a lot of fear that art buyers aren’t really collectors but are just looking to flip works,” says lawyer Judd Grossman, who has represented artists, collectors and galleries as part of his New York practice. Reports both of record high prices and works finding no buyers at auction have proved disruptive to gallery owners, which is why many seek to retain the right to resell pieces originally bought from them. New York
gallery owner Andrea Rosen says, “I have used these clauses on every invoice since I opened ” in 1990. Of course, it’s hard to blame buyers for wanting to realize the profits being generated by the frothy art-auction market. For example, Deborah Butterfield’s bronze, wood and scrap-metal sculptures of horses have consistently done well at auction, twice fetching highs of $229,000, far exceeding presale estimates of $100,000 to $150,000 at Christie’s and Sotheby’s. Yet if you want to buy one of her works at the New York gallery that represents her, you’ll have to sign a contract giving the gallery first dibs on reselling it.
According to Renato Danese, co-owner of the Danese/Corey gallery where Ms. Butterfield’s sculptures are sold, the demand is aimed at protecting both the artist and the collectors who buy her works.
“I don’t want to see my clients gambling at auction,” says Mr. Danese. “What if the work doesn’t sell, or sells below the low estimate? That will hurt the artist in terms of current and future sales, and it will hurt my clients. They will ask me, ‘Why did you sell me something that wasn’t worth as much as I paid?’ And if the work sells for a very high price at auction, that also disrupts the market because other collectors will then think that prices for every work by the artist should be much higher.
What’s the motive?
Not everyone is buying that explanation, however, and some “collectors complain that gallery control is chiefly for their own benefit,” says New York art lawyer John Cahill. They believe galleries care more about getting another commission than they do about helping artists, he says.
In some cases, though, it’s the artists themselves who seek to attach conditions to sales.
The estate of artist Sol LeWitt, for example, has demanded that collectors who buy his works agree to seek its permission before selling to new owners, his former business and studio manager, Susannah Singer, says. Another artist, Hans Haacke, asks buyers to sign a contract agreeing to pay him a royalty of 15% whenever they sell his work for a profit on the secondary market. And if buyers exhibit his work in “a public venue, I want a say in the circumstances,” he says. The reason, according to Mr. Haacke, is that he wouldn’t want his work associated with “corporations I object to.”
The degree to which restrictions and conditions are enforceable in court depends on the language of the sales agreement, lawyers say, adding that some galleries may be willing to negotiate.
For example, you might “say that you will only agree to sell the work back to the gallery, rather than to consign it,” Mr. Cahill, the New York art lawyer, says. Or, you could offer to give the gallery 30 days to buy the piece back from you, but maintain the right to go to auction if you don’t like the price, he says.
But the threat of a lawsuit may not be the most important element in keeping buyers in line.
Collectors who violate sales agreements may have a tough time working with those same galleries or artists in the future.
New York art lawyer Susan Duke Biederman says restrictions and conditions are part of “a quid-pro-quo in a larger relationship between dealer and collector. Dealers want to sell to certain collectors, and collectors want to buy what certain dealers are selling. The main issue is who has the most leverage in that relationship.”
3. NEW YORK When you buy a piece of art, can you be sure it’s really yours? Many collectors don’t always feel certain on that score. They worry in some cases that after they make a purchase someone will show up, maybe years later, and claim the art was stolen at some point in the past—ultimately leaving the new owner empty-handed, without the art or the money paid for it.
That’s one reason many art advisers and lawyers recommend title insurance, which can at least partially protect a collector’s financial interests if a piece of art has to be surrendered. But theft isn’t the only issue. Title insurance also can help protect collectors if the person they bought art from becomes entangled in divorce, bankruptcy, probate or other legal proceedings that question the seller’s right to dispose of the art.
Some advisers say title insurance is particularly important because of the sharp increase in the prices of many artworks in recent years—buyers have more to lose. But title insurance has been a hard sell.
William Fleischer, president of insurance brokerage firm Bernard Fleischer & Sons Inc., says most collectors are willing to forgo the cost, in part because many already have paid advisers and lawyers to check on the authenticity and history of ownership of their art, and they have confidence in those experts.
For those who want additional reassurance, some insurance companies offer “defense of title” coverage, which typically pays up to $100,000 in legal costs in the event of a title dispute but doesn’t reimburse policyholders for the value of any objects taken away from them.
The leading provider of more-complete coverage is New York-based ARIS Title Insurance Corp., a unit of Argo Group International Holdings Ltd. It offers policies that cover legal costs in the event of a title dispute and the full purchase price of the piece if the buyer has to surrender the work. Collectors pay a one-time premium averaging 2% to 3% of the purchase price of the item being insured. They can increase coverage, for an additional premium, if the artwork’s value appreciates.
4. TECHNOLOGY You walk into your shower and see a spider. You don’t know whether it is venomous—or whether it is even a real spider. It could be a personal surveillance mini-drone set loose by your nosy next-door neighbor, who may be monitoring the tiny octopod robot from her iPhone 12. A more menacing possibility: Your business competitor has sent a robotic attack spider, bought from a bankrupt military contractor, to take you out. Your assassin, who is vacationing in Provence, will direct the spider to shoot an infinitesimal needle containing a lethal dose of poison into your left leg—and then self-destruct.
Meanwhile, across town, an anarchist molecular-biology graduate student is secretly working to re-create the smallpox virus, using ordinary laboratory tools and gene-splicing equipment available online. Not content to merely revive an extinct virus to which the general population has no immunity, he uses public-source academic research to make it more lethal. Then he infects himself and, just as his symptoms start, strolls around the airport to infect as many people as he can.
These scenarios may sound fantastical, but they are neither especially improbable nor particularly futuristic. Insect-size drones are busily being developed throughout the defense establishment, in academic facilities and by private firms. Slightly larger drones are widely available for purchase on the open market, some already rigged with cameras. Making such drones lethal is just the next step, and it isn’t that complicated.
As for our anarchist molecular biologist, the National Science Advisory Board for Biosecurity said back in 2006 that the “technology for synthesizing DNA is readily accessible, straightforward and a fundamental tool used in current biological research.” That was a lifetime ago in scientific terms.
The technological platforms associated with robotics, genetics and synthetic biology are enriching every facet of our society. But as President Barack Obama recently lamented about cybersecurity, “one of the great paradoxes of our time” is that “the very technologies that empower us to do great good can also be used to undermine us and inflict great harm.”