But my fine art has a good provenance.
Traditional provenance-related due diligence is a good starting point for every collector.
However, there are many misunderstandings about what a provenance investigation does and does not show from a risk management standpoint and how provenance differs from legal title.
Provenance is the history of physical possession of a work from the date the artist created it to the present day. Legal title is the past and present full right, interest and ownership of the work, which may or may not overlap with physical possession of the art.
Because there is no standard mechanism in the art industry to record and track both sides of a sale-purchase transaction, every provenance carries the inherent risk of being inaccurate or incomplete including the provenance information stated in catalogues raisonn és and auction catalogues.
Provenance review initially arose in the art market to address connoisseurship and was not designed and does not manage transactional risk. It later evolved to address the risk of theft in the context of WWII Nazi-Era stolen art. The majority of the art industry’s legal title risks are unrelated to theft and ordinary burglaries.
Even under the best of circumstances, when it comes to managing the art industry title risks for fine art and collectibles, no provenance or chain of title is perfect.