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ASK THE ART LAWYER. Eviction. The Risks and Rights of the Parties When a Gallery is Evicted

By Octavio Robles, AIA, Esq.

We have all heard of instances where someone gets evicted from their dwelling. Evictions usually occur when the tenant fails to pay the rent or violates a material term of their rental agreement. Businesses are no different. A gallery, frame shop or combination of both that is renting space will ultimately get evicted if it fails to pay the rent or violates the lease agreement in a significant way. When the eviction occurs and the landlord takes possession of the property, if the tenant has not cleared out of the premises, the likelihood is that there will be personal property left inside. Such personal property may be owned by the evicted business, may be valuable or not or may be owned by clients and consignors of the business who were clueless about the eviction taking place. Those clients and consignors are likely the owners of art being held for sale or for service, like framing.

WHAT HAPPENS TO THE ART?

There is a simple answer to this question; it goes back to the rightful owner. Personal property in an eviction proceeding, regardless of who it belongs to, goes back to its owner. This is the case even if the personal property belongs to the business being evicted. Eviction causes of action are cases that procure that the possession of the real property is returned to the real property owner. There may be instances where personal property is pledged or where personal property has been attached to the real property and has become part of the real property. An example of such an instance is where an air conditioning or lighting system has been installed in the premises. The problem with the simple answer above is that sometimes determining who the rightful owner is can be difficult.

WHAT GOES TO WHO?

When an art related business is evicted or its tenancy has ended and it is determined that the tenant has moved out and possession of the premises has been returned to the landlord, personal property that is left behind may be considered abandoned and the landlord effectively becomes the custodian of the abandoned personal property. As such, the landlord must keep them in a safe location until they can be claimed by the rightful owner or properly disposed of. Obvious junk, like empty bottles, old newspapers and the like, can be thrown away.

Copyright: O.R.

Copyright: O.R.

In order to properly dispose of abandoned property, the landlord must notify the former tenant of the property in his possession. In the notification process, the landlord must notify the former tenant by describing the items. If the landlord has reason to believe that some of the items belong to someone other than the former tenant, he must also give notice to the suspected additional owner. Florida Statutes section 715.105 and 715.106 provides models of notice forms that can be used. The notice may be hand delivered or mailed. If hand delivered, the former tenant or personal property owner has ten days to claim the property. If the notice is mailed, then the allotted time is fifteen days from the time the notices are actually mailed, to claim the property. The notice must describe the property, where it is being stored, the time wherein the claimant must claim the property, the storage fees being charged and that if not timely claimed and fees paid, the property will be disposed of.

WHO OWNS THIS STUFF AND WHAT IS IT WORTH?

In cases where the tenant or other suspected property owner do not claim the property, the landlord must determine whether the aggregate value of the items is $500 or more. This threshold would probably be easy to reach where the abandoned property is mostly art. In such cases, the abandoned property must be sold at a public auction. The day and time of the auction must be advertised in a local newspaper at least once a week for two weeks before the auction. In rural areas where there may be no newspaper in circulation, the notice of auction must be posted in no less than six conspicuous places near the place where the auction will take place. The property owner may claim the property right up until the auction takes place. The owner/claimant would have to provide reasonable proof that they own the property. With art, that may be difficult to do.

If the auction takes place, the proceeds of any property sold may be first used to pay storage and expenses related to the sale. Within 30 days of the auction, any remaining funds must be deposited with the county where the case took place. A property owner can claim the funds for up to a year after the auction took place. Again, the claimant will have to prove ownership of the sold items.

A CASE IN FLORIDA

Early this year, Shader Warehouse, LLC, a landlord in Orlando, evicted Specialty Art Services, a gallery-frame shop. Specialty Art Services had many works of art either on consignment or waiting to be framed. Much of it was returned to the rightful owners by the shop before the eviction took place. By the time the eviction actually occurred, the owner had left behind numerous works of art. The landlord properly sent a proper notice to the former tenant and allegedly, to some artists it had identified giving all fifteen days to claim the art and pay storage fees in the amount of $500 for each item. Five artists expressed a desire to claim their work which was either in the process of framing or had been placed for sale on consignment with the shop. None of them could afford the $500 storage fee. All of them had a written proof that the items belonged to them.

All the art work, including the works belonging to the five claiming artists, were sold at auction. Although they could prove ownership, the cost associated with storage, which is legally permitted, prevented the artists from recovering their work. The only remedies left for the artists is either to claim any funds that may be left and placed with the county within one year of the auction. They may also file an action against Specialty Art Services to recover their losses but that chance is slim and Slim, the shop owner, has disappeared.

BEST PRACTICE

The recommended practice when either consigning a work of art with a gallery for resale or having a work of art serviced is to document, document and document. If having a work of art serviced, get a work order in writing. If entering into a consignment agreement, do so in writing. Under the Artist’s Consignment Act, Florida Statutes section 686.501-686.506, there are provisions for artists to protect themselves by attaching notices on the consigned art itself that alerts the public and others such as landlords, that the art is being sold subject to a consignment contract. It should include information where notices, such as abandoned property notices, may be sent. Many times, at the insistence of the consignee/dealer, artists do not disclose their personal contact information in order to prevent a potential buyer from going directly to the artist in an effort to bypass the dealer. This would not have prevented the artists in the Specialty Art Services case from avoiding the storage fee that ultimately prevented them from recovering their work. That leaves, as the only reliable practice, to know well who you are doing business with. But regardless, always document the transaction in writing.

Octavio Robles, AIA, Esq. is a legal contributor to ARTDISTRICTS and a member of the Florida and Federal Bars (Southern District of Florida). He is a Florida Supreme Court Certified Mediator and Approved Arbitrator; a member of the Construction Committee of the Real Property, Probate and Trust Law Section, the Art and Entertainment, and the Alternative Dispute Resolution Law sections of the Florida Bar; and a member of the American Institute of Architects, Art Deco Society of Miami and Copyright Society of the USA. He holds licenses as a registered architect, state-certified general contractor and real-estate broker in Florida and is a LEED-accredited professional. He received his Juris Doctor degree from the University of Miami School of Law in 1990. He holds masters’ degrees in architecture and construction management and a bachelor’s degree in design, all from the University of Florida. His practice is limited to art, design, architecture, construction and real-estate law.