Private loans of fine cultural objects to museums – why do it and how to mitigate the risks

Assets and Advice:

Advisors in the family office and private client sphere are used to advising clients in relation to their assets. But what should an advisor or their client think about when asked by a museum or cultural institution to lend their work towards an upcoming exhibition? This is not a normal request and bespoke advice is often required.

Clearly, the incentive for collectors of lending fine art, classic cars and rare objects to an institution is having the satisfaction of enabling the public to view something special that ordinarily would be in private hands behind closed doors. For example, a work of art by an Old Master artist that may not have been available to see for a number of years would bring joy to art enthusiasts who would get a rare opportunity to see it. Also, another benefit for the owner is creating an interesting exhibition history for an asset that increases its value.

Would you lend your classic car to an exhibition?

Reasons to tread carefully:

Many assets will be incomparable to the owner for a number of different reasons. For example, it could genuinely be priceless in value, irreplaceable or a one of a kind object, such as a painting by Rembrandt or a rare Ferrari built in the 60s. Or, it could be a family heirloom that has been passed on through the generations and which has significant emotional significance to the current owner. Because the object will generally also be worth a considerable amount financially, owners will want to tread carefully and take sage advice when giving up an object from their control for an exhibition.

Lending to museums does, and has, gone wrong. The assets are at risk of being damaged, destroyed and stolen. Taking two obscure examples, in 2005, 54 paintings, including works by Van Gogh, Monet, Renoir and Picasso were lent by the Pushkin Museum in Russia to the Pierre Gianadda Foundation in Switzerland. The paintings were seized by the authorities after a Swiss import and export business obtained a judgment to freeze the assets claiming it was owed several million dollars by the Russian Government. Another example was the seizure of the Portrait of Wally by Schiele, which had been in the collection of Rudolf Leopold, and was seized in New York whilst on loan to the Museum of Modern Art due to the well-founded allegations (as it turned out after the conclusion of a long Court battle) that the painting was a piece of Nazi-looted art from World War II and capable of restitution to the heirs of the original owner.

The points to be considered are wide ranging and it is important that all risks are appropriately covered off in the loan documentation.

The paperwork – what needs to be covered off?:

Although non-exhaustive, some of the key areas to consider when agreeing to loan objects to a museum are:


In the UK, the key question is whether it is protected whilst in situ under the Government Indemnity Scheme (GIS) as set out in section 16 of the National Heritage Act 1980. This should, provided the museum has conducted adequate due diligence and complied with certain requirements, provide an indemnity for any loss or damage to the asset. Arrangements must be made to insure the work separately when it is in transit to and from the museum, as the GIS only provides cover for the assets whilst it is on the relevant museum’s premises. Also, a recent, non-debatable valuation and appraisal of the asset should be obtained to ensure any insurances cover up to an appropriate value.

Immunity from Seizure:

In the UK, many institutions have obtained immunity from seizure for works lent to them from abroad. This is prescribed by part 6 of the Tribunals, Courts and Enforcement Act 2007 and must be applied for by the institutions. The immunity from seizure will generally only be available if galleries have conducted adequate due diligence into the asset. The agreement should cover liability if the gallery has fallen below the requisite standards.

Environmental Conditions:

A condition report and valuation of the asset should be obtained before the loan and afterwards. This may be done in conjunction with the valuation required when insuring it as discussed above. The condition reports will be important in assessing whether there has been any damage to the asset. Also, thought should be given to the temperature, relative humidity and air quality that the asset should be kept in, as well as dealing with security arrangements and other display requirements that pertain to the asset.

Other Considerations:

Other considerations would be the standard terms of the agreement dealing with the length of the loan, the conditions attached to it and who is responsible for the asset as it goes through the journey from private hands, to the exhibition and back again. There are decisions to be made (and effectively documented) concerning copyright, intellectual property rights and the reproduction of images of the asset. Also, finally, confidentiality should be dealt with. If an individual wants to remain private, for example, it should be in writing the museum may only refer to the asset as coming from a ‘private collection’.

The last crucial point to make is that the advice and documentation must be specific to the asset in question. A loan involving a work of art will, by necessity, be markedly different to a loan involving a classic car.

This article was written by Fred Clark and Tim Maxwell and was first published in the Winter 2017 edition of the Art & Museum Magazine.

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