As buyers of art we must all be very careful not to be overcharged. Auction houses are tending to charge the ARR willy-nilly. The fact is they do not care because they merely pass the charge on to their unfortunate buyers.
Recently I made a good buy in a major London Auction House: I bought 6 Salvador Dali prints for the hammer price of £2200-00. When I received the invoice I found I had been WHACKED an additional £88-00 in Artists Resale Right. Needless to say the bill went straight back to the auctioneer for amendment. Each individual piece cost less then €1000 and there should have been no ARR charged.
When I went in to pay for the goods I experienced more problems. I was told that the 6 items were “a set” and therefore counted as an integral whole on which ARR was due to be charged. I explained that there were 12 in “The Set” and I had bought 6. They maintained ARR had to charged. When I refused to pay they called DACS. The person who answered the phone at DAX asked if one of the items was worth substantially more then the others (i.e. more then €1000-00) to which the answer was “NO”. DACS said that this was an unusual case and they would consider it and call back. My auctioneer friend said that enough was enough and he was giving me the item without charging ARR and I paid and left.
This is a warning to Art Dealers. Check your auction bills very carefully and stand up for your rights. It seems that in this climate everyone is keen to charge ARR even when it is not due. Do make sure you are not made to overpay.
Regards
Niall
Lewis Baer
July 14, 2012
Niall,
You think the ARR fee is all they subtly try to pass on? How about what they hide from the seller? Did you ever see a statement of results to a consignor that listed the buyer’s premium collected on THEIR behalf by the auctioneer? The Sotheby’s/Christie’s duopoly started the buyer’s premium yet they don’t disclose that amount to the seller, who is giving it to them. All auctioneers should disclose those charges to the consignor.
And how about collection or exemption of the (state) sales tax on the merchandise…..Their blanket comments aren’t a substitute for documentation of collection.
I hate to go back to this sore topic, but “public auctions” need government regulations to promote full disclosure of fees, like any public financial market.
Lewis
http://www.newel.com
Adam Hutter
July 14, 2012
Wow,
ARR? DACS/DAX? Sounds like there is more crud going on in jolly ole England. Me? I wish we could go back to the old days of just a selling commission and no buyers premiums. Straight up! But, no good. I could not compete with others if i eliminated the BP.
So, i institute a buyers premium. 20% selling and 20% buyers. Mainstream to most other auction houses of my caliber. I do it to stay in business and stay competitive with the other auction houses.
However, Lewis, I cannot speak for Christies and Sotheby’s, but I know in my place, also in NYC like you, a lot of consignors come to the auction itself. And, yes, there is a statement in the catalogue about buyers premium on all purchases. And sales tax regulations are in there too. There is nothing hidden. And that on the internet there is a 23% BP. Also BP is a taxable service. The government knows this too.
Come on in sometime, we are just across town from each other.
Adam Hutter
http://www.hutterauctions.com
Lewis Baer
July 15, 2012
Adam,
Just because you say you charge a buyer’s premium in a catalog and consignor contract, you don’t disclose the actual total amount you collected to the consignor. Auctioneers claim they work for the consignor; when you show your commission on each piece that you sell, why not the premium too, which you also keep? Regarding (NY) state sales tax, we are both classified as “sales tax vendors” that collect sales tax unless documented with a resale certificate or bill of lading. Every dealer should by any standard, receive an auctioneer’s resale certificate if they consign merchandise which is sold to validate their own tax of the sale.
Adam, I respect that you would prefer to take only a sales commission, that should be the way auctioneers operate. The buyer’s premium has corrupted auction practices. If I started to deduct a buyer’s premium as you suggest as a taxable service and not a part of my cost of goods purchased, I’d had a nice, loosing argument with any tax accountant or auditor.
Beyond those issues, I really don’t like going to auction sales as a matter of better use of my time and not wasting it on bogus bids below the secret reserve price. Even estimates are a joke and give a false impression on the value. Starting at the reserve price and collecting only a seller’s commission would eliminates a lot of issues that plague how auctions operate.
Lewis
P.S. Adam, I believe the last time I ever bought something at an auction might have been at your downtown location many years ago!