Buying and selling

Passing of title

When does ownership of art, antiques and collectibles pass from seller to buyer?

Ownership usually passes upon transfer of possession from the seller to the buyer. The parties are free to agree on a different time, for example upon receipt of payment in full.

Implied warranty of title

Does the law of your jurisdiction provide that the seller gives the buyer an implied warranty of title?

The German Civil Code (CC) provides for the presumption that whoever has possession is the actual owner of the object (section 1006, CC). This presumption can, inter alia, be refuted by a previous owner if the object was stolen, lost or otherwise removed from his or her possession without his or her consent.

Registration

Can the ownership of art, antiques or collectibles be registered? Can theft or loss of a work be recorded on a public register or database?

There is no register for ownership of art. Theft or loss of a work can be recorded, for example on the Art Loss Register, or the Lost Art Database if the work was lost during the Third Reich period.

Good-faith acquisition of stolen art

Does the law of your jurisdiction tend to prefer the victim of theft or the acquirer in good faith of stolen art?

German law tries to balance the interests of the victim of theft of art and the good-faith acquirer. In principle, there is no good-faith acquisition of title for stolen art (section 935(1), CC). However, a person who acquires the stolen work of art in good faith and has this work in his or her possession for at least 10 years, while continuing to be in good faith, acquires valid title. If a person, upon his or her death, was not in good faith but the heir is in good faith, the heir can acquire legal title after 10 years from the point of inheritance. Legal title of a stolen work of art will also transfer to the good-faith acquirer if the work of art is sold in public auction (section 935(2), CC; Federal Supreme Civil Court, decision of 5 October 1989 - IX ZR 265/88).

An acquirer is deemed to be not in good faith if he or she either positively knew, or should have known, that the seller was not the owner of the object. There is no general duty on the purchaser to investigate the validity of the seller’s title. If the circumstances of the sale give rise to a concrete suspicion, an obligation to investigate may arise. If the purchaser disregards those suspicious signs and refrains from further investigation, he or she will not acquire good-faith title.

Acquiring title to stolen art through prescription

If ownership in stolen art, antiques or collectibles does not vest in the acquirer in good faith, is the new acquirer protected from a claim by the victim of theft after a period of time?

A bad faith acquirer cannot obtain legal title. The claim for return of the stolen asset expires after 30 years from the day of loss (section 197(1), No. 1 CC). There is no obligation for the victim of theft to bring the claim at the earliest opportunity. If the circumstances are such that the victim has conveyed the impression that he or she has given up on the claim, the acquirer may hold this against a subsequent claim for return of the object.

Can ownership in art, antiques or collectibles vest in the acquirer in bad faith after a period of time?

No. The bad faith acquirer will not obtain valid title. However, the rightful owner may lose his or her right to claim for return of the work after the 30-year statute of limitations has expired.

Must the professional seller of art, antiques or collectibles maintain a register of sales?

There is no specific obligation, other than for purposes of book-keeping, tax, etc.

Risk of loss or damage

When does risk of loss or damage pass from seller to buyer if the contract is silent on the issue?

The risk of loss or damage passes on transfer of possession to the buyer. The parties can contractually agree on a different point in time.

Due diligence

Must the buyer conduct due diligence enquiries? Are there non-compulsory enquiries that the buyer typically carries out?

Under the Cultural Goods Protection Act (CPPA) of 2016 anyone who engages in the trade of cultural goods must exercise a reasonable duty of care to determine whether a piece was stolen or illegally excavated (section 41, CPPA). Additional obligations apply to professional dealers, such as the obligation to examine the identity of the seller, the provenance of the work, and the accuracy of any import and export papers (section 42, CPPA). A particularly high standard of care is to be exercised if there are circumstances that suggest that the work may have been taken from the rightful owners during the Third Reich period (section 44, CPPA).

Must the seller conduct due diligence enquiries?

The obligations set forth under sections 41, 42 and 44 of the CPPA also apply to a seller.

Other implied warranties

Does the law provide that the seller gives the buyer implied warranties other than an implied warranty of title?

Generally, there are no implied warranties. Exceptions may apply to descriptions in auction catalogues (see Federal Supreme Civil Court, decision of 13 February 1980 - VIII ZR 26/79).

Voiding purchase of forgeries

If the buyer discovers that the art, antique or collectible is a forgery, what claims and remedies does the buyer have?

In general, if the work of art is a forgery, it is defective if it has been sold as genuine (Federal Supreme Civil Court, decision of 13 February 1980 - VIII ZR 26/79). In this case, the buyer can claim rescission of the contract or a reduction of the purchase price, as well as damages if the seller acted with intent or negligence (sections 434 and 437, CC).

If the buyer has been defrauded by the seller, he or she also has the right to void the contract and claim repayment of the purchase price.

Voiding inadvertent sales of works by masters

Can a seller successfully void the sale of an artwork of uncertain attribution subsequently proved to be an autograph work by a famous master by proving mistake or error?

Section 119(2) of the CC provides for the right of any party to a contract to void the transaction if he or she erred with respect to a relevant property of the asset in question. It has been held that the authorship of a work of art qualifies as a relevant property (Federal Supreme Civil Court, decision of 8 June 1988 - VIII ZR 135/87) and that the seller can validly void the purchase agreement if, at a later stage, it turns out that the work was actually that of a master rather than only being a copy or from the studio of the master. The seller bears the burden of proof of the origin of the work.

Law stated date

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