Decade(s) Later: New York Arts & Cultural Affairs Law 12.01

Reprinted with permission from the NYS Bar Association, this article first appeared in the EASL Journal, 2023, vol. 34, no. 1.

By Atreya Mathur, Dean Nicyper and Irina Tarsis^[1]

Since 1966, Article 12 of New York Arts and Cultural Affairs Law (“NYACAL” or the “Statute”) has protected the rights of artists, their estates, and their heirs in their dealings with art merchants, at least in theory. The law changed over the decades and most recently was strengthened in 2012 after a major art gallery, Salander O’Reilly Galleries, was found to have sold many consigned works without paying consignors (artists and collectors), spent the sale proceeds, and ended up in bankruptcy. Today, under the Statute, art merchants are required to act as fiduciaries regarding art consigned to them by artists. Dean Nicyper, one of the attorneys instrumental in drafting and lobbying to pass the 2012 amendments to the law and a co-author of this article, has been quoted as saying “What we found in New York was that the galleries were not respecting [the law] … Galleries sold paintings and they did not separate the sale proceeds as trust funds, but the legislation did not include any penalties. It said, ‘galleries may not use artist’s sale proceeds for the gallery’s operations,’ but it did not say what would happen if they did.”^[2]

Legislative History