Should you be using an art leasing agreement?
Some businesses view art as an investment and buy artwork for a permanent collection. However, more and more businesses are renting artworks as a way to keep their costs down and to have the ability to create new and exciting displays. Art doesn’t just exist in luxury business spaces, you can find all types of art in a variety of businesses and within a huge price range.
Hotels and other businesses in the past decade have doubled down on the importance of art to help create their spaces. Art not only creates an experience for the customer but helps businesses create their own brand.
That's where art leasing comes in.
You can not only make money from selling your work, renting art is a lucrative business that allows you to create a passive income from your artworks. You can generate revenue from renting artworks and then sell them permanently in the future, increasing your income potential.
But, before you get started, make sure you are covering all your bases with an art leasing agreement.
Here is are a few tips on what to include in an art leasing agreement and why you should always use one when renting your artwork.
What are art leasing agreements?
An art leasing agreement is a contract between an artist and a renter. Within the art leasing world, galleries and companies contract out art and act as a middleman between artists and renters.
You can rent your art with the help of a third-party service, a gallery, or a specific art rental company, or you can rent your art to clients on your own.
An art leasing agreement should be an element of any art rental, laying out the terms and conditions between you the artist, and the renting party.
Why lease your art?
Leasing art allows your renters to experience art in their homes or offices without the commitment of owning a work. Leasing is less expensive initially and may allow a business to write off renting art as a continued work expense. Businesses like to rent art as renting allows for variety—clients are able to rotate out art. Renting art appeals for one-off occasions like a professional gala or in the media industry, for example using art in a scene on a television show set.
Leasing art lets your work that might otherwise be sitting in your studio work for you. Your art can act as an investment, generating income for you before a client purchases it and takes it off the market permanently.
If you have ever felt like you needed to lower the price of your art in order for it to sell, renting your art can help assuage this tension.
Get your art into a client’s hands
Before creating any type of contractual agreement, you’ll first need to share your work with potential clients.
Think about who you are interacting with and the aim of your outreach and art sharing. Before sending over any type of art portfolio or inventory report, have a conversation with your client. Knowing what a client is looking for will help you provide artwork options that your client will like and ultimately rent or buy from you.
Since you are wanting to show a specifically curated selection of works for a company to review, a tool like Artwork Archive’s Private Rooms is a great way to digitally share and create a sense of exclusivity. With Private Rooms, you are able to create a digital showroom of your different artworks and their information as well as writing a personal message to your viewer. Private Rooms are interactive and easy to share with a URL that you can choose to protect with a password.
When to use a leasing agreement
The difference between renting, loaning, consigning, and selling your art is that you are actively receiving money for your rented work versus having a one-time final payment for a sale. An essential similarity between renting, loaning, consigning, and selling art is that you’ll want to have official documentation in place.
Whenever your work is in someone else's hands you need official documents in place to ensure that your work is properly cared for, and in the case of renting— to make sure you are paid.
When you are renting your art, you will want to use a rental agreement to make sure that you are paid on time and to create a professional relationship with your client.
Anytime you rent your artwork, you should be using a leasing agreement.
How to use a leasing agreement & what to include
The components of an art leasing agreement will differ if you yourself are the leasee or if you are going through a company to rent your work. Either way, you should carefully review any agreement to make sure that there is a plan for the care and safety of your art, as well as a clear outline of the agreement and payment plan.
There are a few details that you should include in an art rental agreement to create a successful contact. Here are a few of them.
Title to the artwork: This clause protects the ownership of the artwork by specifying that the artwork remains the property of the owner or by proxy, the company in charge of renting art. This element may include details about if photography of the art is permitted and stipulations regarding the use of photos.
Maintenance and alterations: This element maintains that the art will be kept in its original condition, with necessary upkeep and that its condition will not be altered. There should be an outlined plan for who to contact if the artwork is damaged and how the art will be evaluated for damage at the end of a lease.
Terms of agreement: Terms of the agreement should outline the rental contract, including details or dates and times, transportation, installation, and conditions for the extension and termination of the art lease. If art is leased from a third party like a gallery, this clause will often include the gallery’s right to terminate a lease if the artwork is sold.
Continuation or purchase: The "terms of the agreement" often include a clause for the continuation of rental. These are the stipulations for when an artist or company will need to know if a renter is renewing their lease. If a renter wants to purchase the art after renting, there are often details about prorating the sale price based on how long the renter has leased the work. Typically, 50% of the rental payments to date can be applied to the sale of the work.
Transportation: Details for the transportation of artwork are outlined in a leasing agreement.
Insurance: Art-on-lease typically needs to be insured. How the work is insured can differ depending on if the work is insured by a gallery or company that it is being rented through, or if renters have home or office insurance that would cover art. In some cases, agreements will have renters cover the cost of art insurance.
Security deposit: A renter typically pays a security deposit before gaining possession of an artwork. In some cases, an artist or company will take payment details but not charge a deposit fee unless the work is damaged or a renter acts outside the terms of the agreement.
Liability clause: It’s common to include a liability clause within an art leasing agreement to outline who is responsible for potential damages to the artwork.
Sample art leasing agreements
Using an art leasing agreement is a crucial component for a successful art career. Whatever type of art selling, renting, or consigning you are doing, you’ll need to be prepared to use professional contracts and documentation. Using the right contracts and documentation is just part of being a working artist.
As always, we recommend consulting a lawyer for your particular legal needs and this should not replace legal advice.
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