How to Invest in Art: A Legal Perspective
Updated October 2026
In 2004, Domenico and Eleanore De Sole paid $8.3 million for a painting attributed to Mark Rothko. They bought it from Knoedler & Company, a New York gallery that traced its history to 1846. The painting was a fake.
Between 1994 and 2009, Knoedler sold almost 40 fake paintings attributed to Rothko, Jackson Pollock, Robert Motherwell and others. They had been painted by one man in Queens. Knoedler closed in 2011, after 165 years in business, and the dealer who supplied the paintings, Glafira Rosales, pleaded guilty in 2013. In all, buyers paid more than $80 million for her fakes. The De Soles sued, and their case settled in 2016, two and a half weeks into trial.
Few collectors will ever face anything like it. The lesson still applies to every purchase. Buying from a respected seller helps, but your protection is in the paperwork. What exactly is the seller promising? What happens if a promise turns out to be wrong? Will the seller still be there to make it right?
Investing in art is no longer just for the few. Before you buy, know the legal side of buying, selling and borrowing against art.
Diversifying Your Portfolio
Art is often described as an asset class that does not move in step with stocks and bonds, and some investors hold it as a hedge against inflation. Whether art belongs in your portfolio, and how much, is a question for your financial advisor. My part is the contract and the paper trail. I put the seller’s promises in writing, build in a remedy if a promise proves wrong, and help you keep the documents you will need when you sell or borrow.
Legal Considerations
Provenance
Provenance is the history of a work’s ownership. Ask for it in documents: invoices, bills of sale, exhibition catalogues, auction records and correspondence. A good story is not provenance. The Knoedler paintings came with a story about a private collection whose owners wished to remain anonymous.
Authenticity
Authenticity is a question for independent specialists, and I help clients bring in the right one. Keep in mind that several major artist foundations have stopped giving opinions. The Andy Warhol Foundation dissolved its authentication board in 2012, after spending, by its own account, at least $10 million defending lawsuits over its decisions.
The contract is where a lawyer helps most. Under the Uniform Commercial Code, which Florida has adopted, a seller’s description of a work can itself become a warranty.
Florida goes further when you buy from an art dealer, including an auction house. When a dealer gives a buyer who is not a dealer a written description naming the artist, Florida law treats it as a warranty that the work is by that artist. That holds even if the dealer calls it an opinion or adds a general disclaimer. Terms such as “attributed to” and “school of” promise less, so read the paperwork before you pay. New York has a similar law, but the details differ. In Florida, for example, a dealer who acted in good faith generally owes no more than a refund of the price, plus attorney’s fees and costs if it refuses to comply. The law is not the same in every state.
Your contract should include the seller’s written promise that the work is authentic, a clear remedy if it is not, and some comfort that the seller will be able to pay. For a significant purchase, the price can sit in escrow until the work is delivered, inspected and reviewed. At auction, you usually cannot negotiate these terms, so do your checking before you bid, and note any deadline to challenge authenticity.
Copyright
Owning a painting does not give you its copyright. Under federal law, ownership of the object and ownership of the copyright are separate, and the copyright usually stays with the artist or the artist’s estate. Putting the image on products, in advertising or online can require a license, even though the work hangs in your home.
Collateral
Significant art can also be pledged for a loan, which lets you raise cash without selling, and the work can often stay on your walls. What lenders ask for is in Unlocking Your Wealth: Collateralizing Art, Yachts and . . . Cheese?
Other Issues to Plan For
Auction terms, insurance, shipping, storage and taxes all affect what a work really costs and what you keep when you sell. Florida sales or use tax can apply to art bought in Florida or brought here, so have your tax advisor review a purchase before you sign.
Export rules matter too, especially for Miami collectors buying in Latin America. Several countries restrict the export of works they consider national patrimony. Mexico has declared the work of Frida Kahlo, Diego Rivera, José Clemente Orozco, David Alfaro Siqueiros and others to be artistic monuments of the nation. It has refused to let a Kahlo self-portrait leave the country permanently. In July 2026, Mexico’s Supreme Court agreed to hear a challenge to the 1984 decree that covers Kahlo. As of October 2026, it has not ruled. Before you buy a work located abroad, confirm that it can legally come to the United States and stay.
Before You Buy
I collect art myself, and I advise collectors on buying and selling it. Before you wire funds for a significant work:
- Get the provenance in documents, and get each gap explained in writing.
- Make the sale depend on review by the right specialist.
- Put the seller’s promises about title and authenticity in the contract, with a remedy.
- Use escrow, so funds move only when the work is delivered and inspected.
- Confirm the seller has the right to sell, check for liens, and have any loan against the work paid off at closing.
- Get in writing whether an advisor is your agent or is selling to you as a dealer, how they are paid, and any interest they have in the work.
If you are thinking about buying or selling a significant work, let’s talk.