California Resale Royalty Act

The California Resale Royalty Act (Civil Code section 986) entitles artists to a royalty payment upon the resale of their works of art under certain circumstances.

Act does not apply if:

When the sale of a work meets the conditions outlined above, a seller must pay the artist 5% of the resale price. If the artist is deceased, the payment goes to the artist's estate or heirs. It is the seller's obligation to locate the artist within 90 days of the sale. If the artist or heirs cannot be located, the seller is to make payment to the California Arts Council, who will hold the collected payments for up to 7 years for the artist. In the event that the Council is unable to locate a particular artist or the artist fails to claim the collected royalties in that time period, the funds collected are distributed to the city of Sacramento's Art in Public Places program.

The artist's right to receive the royalty cannot be waived in full; it can only be modified by written contract providing for a royalty payment in excess of the 5% of resale value that is required by the Act.

California's Resale Royalty Act was signed into law in 1976. The resale right has its origins in the French law droite de suite, first enacted in 1920, which provided French artists the right to receive a royalty from resales of their work. The droite de suite reflects both the idea that artists have certain moral rights in their works (such as the inalienable right to be associated with their works) and the economic concern that artists often are unable to benefit from the full value of their works, where they have low bargaining power in initial sales or where their works appreciate significantly in value after the first sale. As of 2012, over 60 countries across the world recognize some version of the resale right.

The Berne Convention for the Protection of Literary and Artistic Works of 1886 included a droite de suite provision in Article 14ter in its 1948 revision. This article provided for a general recognition of a resale right among signatory countries, but included the stipulation that protection provided by such recognition “may be claimed in a country of the Union only if legislation in the country to which the author belongs so permits, and to the extent permitted by the country where this protection is claimed.”

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