ADMINISTRATION OF THE GOVERNMENT (Chapters 1 through 182)
REGULATION OF TRADE
CONSIGNMENT OF FINE ART
Separate accounting of consignments; payment to consignor of sale proceeds; penalties
Section 4A. (a) A consignee who accepts a work of fine art hereunder and who shall receive money upon the sale of a consigned work of fine art shall show the accounts of each consignor separately on its books. Maintenance by the consignee of separate sub-accounts at its bank in the names of multiple consignors shall serve as prima facie evidence of fulfillment of the separate accounting requirement.
(b) Upon the sale of a consigned work of fine art, the consignee shall pay to the consignor funds owed to the consignor, less any monies owed by the consignor to the consignee, within 90 days of receipt by the consignor of proceeds for the sale. Failure of the consignee to comply with this section shall entitle the consignor to be awarded the amount owed to the consignor together with interest, calculated at a rate of 5 per cent per annum from the date when the payment became due, together with court costs and reasonable attorney’s fees incurred by the consignor in collecting monies owed.
(c) Failure by the consignee to pay the consignor funds owed to the consignor, less any monies the consignor owes to the consignee, within 180 days of receipt by the consignee of the funds, shall entitle the consignor to be awarded a sum equal to 3 times the amount owed to the consignor together with interest, calculated at a rate of 5 per cent per annum beginning 90 days after receipt by the consignee of the funds, together with court costs and reasonable attorney’s fees incurred by the consignor in collecting monies owed.
(d) A consignee shall not be held liable for any payment obligations or penalties, if the form of payment provided by the purchaser of a work of fine art is denied processing by its bank or credit card company; but the consignee shall be liable for recovering a work of fine art from the purchaser if the purchaser’s payment cannot be processed.
(e) The consignee shall not be held liable for any payment penalties if the consignee has in good faith attempted to make payment to the consignor, but the consignor has not kept his contact information current with the consignee. If the consignee has in good faith attempted to pay the money in trust owed to the consignor, but has not been able to locate the consignor in 4 year’s time of the sale of the consigned work of fine art, the consignor’s money in trust shall be forfeited to the consignee.
(f) In the event of the closing of the consignee’s business, the consignee shall be responsible for notifying the consignor in writing of the closing of the business. All consigned work shall be returned to the consignor by the consignee and all moneys held in trust shall be allocated to the consignor in full within 90 days of the closing. Additionally, in the event of a closing or bankruptcy of the consignee’s business, the controlling persons of an art dealership shall be obligated to keep and maintain all records of the dealership for 4 years.