Droit de suite: the artist’s resale right and compliance in the sale of artworks

The secondary art market has a feature that sets it apart from other sectors: works of art can appreciate considerably in value over the years. A piece originally acquired for a given price may, on a subsequent sale, fetch a far higher sum as a result of the artist’s growing reputation, changes in the market or the recognition the work itself has gained.

In response to this, the law grants artists a mechanism enabling them to share financially in that increase in value. This is the so-called artist’s resale right, or droit de suite, under which the creator, and subsequently their heirs, are entitled to receive a sum linked to the price achieved on certain resales of their works.

What is the droit de suite?

The droit de suite originated in France in the early twentieth century in response to a situation that was becoming increasingly apparent in the art market: certain works bought from artists for relatively modest sums could, years later, command very high prices on the secondary market, without the creator sharing in that increase in value.

Whilst collectors, gallerists and other market participants could make substantial profits on resale, the artist received nothing further from the rise in value of their own creation. It was against this background that the droit de suite emerged, conceived as an economic right enabling artists to benefit from the evolving value of their work on the secondary market as well.

The French term translates literally as a “right to follow”, precisely because it allows the artist to follow, in financial terms, the path of certain works after their first sale.

Ultimately, the purpose of this right is to bring a degree of balance to the economic relationships that arise around a work of art. The artist is remunerated not only for creating the work and for its first sale, but may also share in any subsequent increase in its value, provided that the resale takes place under the conditions laid down by law.

Legal framework

The droit de suite is governed by Article 24 of the Consolidated Text of the Spanish Intellectual Property Act (Texto Refundido de la Ley de Propiedad Intelectual, “TRLPI”). This section certain authors of works of art the right to receive a share of the price obtained on subsequent resales of their works. It is a specific right within the field of intellectual property which, despite being relatively little known outside professional art circles, can have a significant financial impact on certain sales.

Its importance is particularly evident where a work has appreciated considerably since it was first acquired. In such cases, a subsequent transfer may give rise to a payment due to the artist or their heirs, provided that the transaction falls within the scope of the legislation.

The droit de suite in the sale of works of art

For owners, collectors, galleries, art dealers and other professionals active in the art market, establishing in advance whether a particular resale is subject to this right is essential. The droit de suite may affect the actual cost of the transaction and must be taken into account when setting the financial terms of the sale, especially where it is carried out through a gallery, an auction house or any other art market professional.

But who should bear this cost? A distinction must be drawn between the party liable to the artist or the collective management organisation and the party that ultimately bears the economic cost. In Christie’s France v Syndicat national des antiquaires (Case C-41/14), the Court of Justice of the European Union held that the professional seller may pass that cost on to the buyer, provided that the statutory resale right regime is respected.

Accordingly, in a sale through a gallery, auction house or dealer, it is usually the professional who pays the resale royalty to the author, the beneficiary or the collective management organisation, even though that amount may, in economic terms, have been passed on to the buyer as part of the terms of sale.

The right does not apply to every transfer of a work. For the obligation to arise, certain requirements must be met relating both to the nature of the work and to the manner in which the transaction is carried out. The legislation sets out a sliding scale, whereby each band of the sale price attracts the percentage rate applicable to that band. The resulting royalty must be paid by the party liable (the professional seller or intermediary) to the author of the work or to the collective management organisation acting on their behalf.

Limits of the droit de suite

This right is subject to both time and financial limits. The droit de suite may be exercised throughout the author’s lifetime and, after their death, by their heirs or successors in title for 70 years from 1 January of the year following the author’s death.

There is also a cap on the amount payable per resale, which may not exceed €12,500. Therefore, even where the calculation by bands produces a higher figure, the royalty is capped at that amount.

Heirs and the droit de suite

Once the artist has died, identifying their heirs or the holders of the resale right may require a specific review of the probate documentation and of the status of the author’s intellectual property rights. In Spain, a first port of call may be VEGAP (Visual Entidad de Gestión de Artistas Plásticos), the collective management organisation that administers the rights of many visual artists and can provide information on whether it represents a particular author and, where appropriate, advise on how to contact the beneficiaries of this right.

Correctly identifying this obligation also helps to avoid subsequent disputes or claims and makes it easier to plan the transaction properly. This is particularly important in the case of family collections, transfers of works acquired decades ago, or pieces whose market value has risen substantially since they were purchased.

What to check regarding the droit de suite before selling a work of art

In conclusion, before selling a work of art it is advisable to consider not only its market value and the tax consequences of the transaction, but also whether the circumstances giving rise to the resale right are present. Reviewing the contracts, the terms of sale and the obligations of each party can prevent unexpected costs and provide greater legal certainty for the transaction.

Furthermore, since transactions involving works of art may raise particular legal and tax issues, it is advisable to assess each case individually and to seek specialist advice before completing the sale or any other transfer.

At Devesa Abogados, we can help you carry out sales and purchases of works of art with full legal safeguards, analysing each case individually and ensuring compliance with the applicable legal requirements, including the artist’s resale right (droit de suite). Our advice allows these obligations to be anticipated and prevents matters that may seem ancillary from later becoming a problem if they are not addressed from the outset.

Droit de suite: frequently asked questions

Need advice? Visit our dedicated page on the droit de suite in the sale and purchase of works of art:

Art Law