Risk that an asset may be claimed by a third party on the ground that its holder never validly acquired ownership, central to artworks.
Title risk refers to the possibility that an asset may be claimed by a third party on the ground that its current holder never validly acquired ownership, because the asset was stolen, looted or transferred without right at some point in its chain of provenance. It is particularly acute for artworks, whose history may contain grey areas going back decades, foremost among them the lootings of the Nazi regime, framed since the 1998 Washington Principles and still feeding resounding restitution litigation. Unlike theft or fire, a title loss does not destroy the object: it extinguishes the holder's right, who may be forced to return a work acquired in good faith. Specific title insurance policies, long marginal, cover this risk by guaranteeing the work's value in the event of a successful claim; they are gaining importance as provenance due-diligence requirements tighten and as the boundary between the genuine and the fake blurs under the effect of artificial intelligence tools.
The Cassirer case, concerning Pissarro's painting Rue Saint-Honoré, après-midi, effet de pluie, illustrates title risk: the claim of a looted family's heirs pursued the work decades after the events, before the US courts.
title risk, assurance de titre, title insurance, défaut de titre, defective title