Borrowing against art

Types of security interest

In your jurisdiction what is the usual type of security interest taken against art, antiques and collectibles?

Art, antiques and collectibles, as with all movable goods, may be pledged as collateral to secure a loan (article 2784, ICC).

Consumer loans

If the borrower borrowing against art assets in your jurisdiction qualifies as a consumer, does the loan automatically qualify as a consumer loan, and are there any exemptions allowing the lender to make a non-consumer loan to a private borrower?

If the borrower qualifies as a consumer (ie, as a natural person who is acting for purposes that are outside his or her trade, business or profession) and the credit agreement falls within the scope of the Consumer Credit Directive (2008/48/EC), transposed into Italian law by Legislative Decree No. 141 of 13 August 2010, the loan automatically qualifies as a consumer loan.

Consumer credit provisions do not apply, inter alia, to loans to natural persons for an amount exceeding €75,000 (article 122, paragraph 1(a) of Legislative Decree No. 385 of 1 September 1993).

Register of security interests

Is there a public register where security interests over art, antiques or collectibles can be registered? What is the effect of registration? Is the security interest registered against the borrower or the art?

There is no public register for security interests over art, antiques or collectibles as collateral for loans.

However, Law No. 119 of 30 June 2016 introduced the possibility for professional dealers to create non-possessory liens to secure credits related to their business activity (which are not private loans). Those can only be granted over movable property intended for their business activity. This lien must be registered in the online register managed by the Revenue Agency of the Ministry of Economy and Finance.

Non-possessory security interests

Can the lender against art collateral perfect its security interest without taking physical possession of the art?

See question 20.

Sale of collateral on default

If the borrower defaults on the loan, may the lender sell the collateral under the loan agreement, or must the lender seek permission from the courts?

Lenders can sell the collateral and do not need to obtain a court’s permission. However, before selling the pledged item, the creditor must serve a demand notice on the pledger requesting payment within five days of the service date. If no payment is made, the creditor is entitled to sell the collateral at a public auction under the court’s supervision. Article 2797 of the ICC provides that the parties to a collateral agreement may agree that the sale can be carried out by a private auction company.

Ranking of creditors

Does the lender with a valid and perfected first-priority security interest over the art collateral take precedence over all other creditors?

According to article 2748 of the ICC, the lender with a valid and perfected first-priority security interest takes precedence over the other creditors.