Art Purchase Escrow

Art Purchase Escrow is an arrangement used to hold purchase funds securely while conditions relating to an artwork are verified or fulfilled.

Instead of the buyer paying the purchase price or deposit directly to the seller or artist, an agreed sum is paid into an independent escrow account. The funds are held there and released only when the agreed conditions are met.

Art Purchase Escrow is commonly used where a sale is conditional on authentication, provenance checks, expert opinion, or where funds are paid in advance for a newly commissioned work.

Art Purchase Escrow is suitable for collectors, galleries, dealers, artists and advisors involved in high-value art transactions.

It is particularly relevant where authenticity, attribution or provenance must be confirmed before completion, or where a buyer is commissioning a new artwork and paying a substantial deposit before the work is delivered.

Lawyers, art advisors, estates and foundations often recommend escrow where trust is limited, where timing is uncertain, or where the value of the transaction justifies additional protection.

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Art Purchase Escrow is typically used once the commercial terms of a sale or commission have been agreed but before the transaction is completed.

Common scenarios include sales subject to expert authentication, confirmation by an artist’s estate, verification of provenance, or resolution of title questions. It is also used where a buyer pays a deposit or staged payments for a commissioned artwork that will be created or delivered over time.

Escrow helps manage timing risk by ensuring that funds are protected while the agreed conditions are satisfied.

Art transactions often involve high values, limited transparency and a reliance on trust. This is especially true where authentication, provenance or expert opinion is required before a sale can complete.

Buyers may be concerned about paying large sums before authenticity or title is confirmed. Sellers and artists may be concerned about committing time, access or creative effort without certainty that funds are available.

In commissioned works, buyers may be asked to pay a substantial deposit long before the artwork is completed or delivered. This can create risk on both sides if expectations or timelines change.

Art Purchase Escrow addresses these challenges by holding funds independently until the agreed conditions are met.

The primary benefit of Art Purchase Escrow is protection. Funds are set aside for a specific transaction and cannot be used for any other purpose.

Escrow provides a neutral mechanism that removes the need for either party to rely solely on trust. Funds are released only when the agreed conditions are satisfied.

This creates a clear and predictable framework for completing art transactions, even where timing or outcomes are uncertain.

Benefits for buyers and collectors

For buyers and collectors, Art Purchase Escrow reduces the risk of paying too early.

Funds are protected while authenticity, attribution or provenance is verified, or while a commissioned artwork is being created. Payments are made only when the agreed conditions are met.

This allows buyers to commit to a purchase or commission with greater confidence, even where delivery or verification will take time.

Benefits for artists, sellers and galleries

For artists, sellers and galleries, Art Purchase Escrow provides certainty that funds are available and committed to the transaction.

In the case of commissioned works, escrow can hold deposits or staged payments while the artist completes the work, providing reassurance that payment will follow agreed milestones.

Escrow also supports professionalism and clarity, reducing disputes about timing, delivery or payment.

Benefits for advisors and estates

For lawyers, art advisors, estates and foundations, Art Purchase Escrow provides a neutral and defensible way to manage funds.

It avoids advisors holding client money directly and reduces the risk of disputes about control or release of funds.

Escrow also creates a clear audit trail, which can be important in estate administration, cross-border transactions or where works have long-term cultural or financial significance.

Art Purchase Escrow can be structured in different ways, depending on the nature of the transaction. There is no single standard model.

For existing artworks, escrow is commonly used to hold the purchase price while authentication, provenance checks or expert opinions are obtained.

For commissioned works, escrow may be used to hold a deposit, staged payments or the full commission price, to be released as agreed milestones are reached.

In practice, Art Purchase Escrow works by holding funds independently while agreed conditions are fulfilled.

The buyer pays the agreed amount into escrow. The funds remain held while authentication, provenance checks, expert review or creation of a commissioned work takes place.

Once the agreed conditions are met, funds are released in line with the escrow agreement. If conditions are not met, the funds remain held or are returned in accordance with the agreed terms.

All escrow arrangements are administered through the dospay digital escrow portal.

The portal provides a single place where authorised parties can view account balances, payment history and escrow status. It also supports the submission and tracking of information required for payments or releases, in line with the escrow agreement.

Using a digital portal reduces reliance on email chains and manual reconciliation. It improves transparency and creates a clear audit trail for payments and releases. Advisors often find this helpful when reviewing payment history or responding to queries during the life of the project.

Art Purchase Escrow works by holding funds independently while agreed conditions are completed.

Instead of paying money directly to the seller, gallery or artist, the buyer pays funds into an escrow account. The funds remain there until the agreed conditions for release are met.

This protects both sides while verification, creation or delivery takes place.

The sale agreement or commission agreement continues to govern the transaction. It sets out the price, delivery terms, milestones and any expert requirements.

The escrow agreement sits alongside those documents. It deals only with how funds are held and when they may be released.

Release conditions usually mirror the contractual steps, such as receipt of an expert opinion, completion of a commission stage or delivery of the artwork.

Only parties authorised under the escrow agreement can give instructions to the escrow agent. This is agreed at the outset and documented clearly.

Instructions are usually tied to specific events, such as the issue of a certificate, confirmation of a milestone or the occurrence of a payment default. The escrow agent checks that the instruction matches the agreed conditions before acting.

This approach ensures that payments are controlled, predictable and not dependent on informal requests or unilateral decisions by one party.

Only parties authorised under the escrow agreement can give instructions to the escrow agent. This is agreed and documented at the outset.

Instructions are typically linked to clear events, such as confirmation of authentication, acceptance of a commissioned stage or confirmation of delivery.

The escrow agent checks that the instruction matches the agreed conditions before acting. Informal or unilateral requests are not accepted.

Below is a practical view of the steps that parties typically follow when using Art Purchase Escrow.

1. ‍Pay funds into escrow
   The buyer pays the agreed purchase price, deposit or commission amount into the escrow account.‍
2. Funds held while conditions are completed
   Funds remain held while authentication, provenance checks, expert review or creation of a commissioned work takes place.‍
3. Provide confirmation or deliver the artwork
   The agreed expert confirmation is provided, or the commissioned artwork is completed and delivered in line with the contract.‍
4. Release funds in line with the agreed conditions
   Funds are released from escrow to the seller, gallery or artist in accordance with the escrow agreement.‍
5. Handle issues if they arise
   If conditions are not met or further clarification is required, the funds remain held while the agreed process is followed.

Setting up an Art Purchase Escrow account starts with agreeing what conditions must be met before funds can be released. This may include authentication, provenance checks, expert opinion, delivery or completion of a commissioned work.

An escrow agreement is then prepared. This document sits alongside the sale or commission agreement and sets out how funds are held and when they may be released.

At the same time, we begin the account opening and onboarding process so the account is ready to receive funds once payment is due.

The time needed to open an Art Purchase Escrow account depends on the parties involved and the structure of the transaction.

For straightforward purchases or commissions, account opening can usually be completed within a short period once the required information has been provided and the escrow agreement is agreed. Transactions involving offshore entities, estates or multiple intermediaries may take longer.

Most delays arise from incomplete onboarding information rather than from the escrow process itself.

To open an Art Purchase Escrow account, standard onboarding checks are required. These are similar to the checks required when opening a bank account or instructing a law firm.

This usually includes confirming the identity of authorised individuals, the ownership and control of any corporate buyer, gallery or estate, and the source of the funds being paid into escrow.

We may also need basic information about the artwork or commission so the escrow account can be set up correctly.

The following information is typically required to open an Art Purchase Escrow account:

• Details of the buyer and seller, gallery or artist
• Identification information for authorised individuals
• Corporate or estate documents showing ownership and control, where applicable
• Source of funds information for the escrowed amount
• Summary of the sale or commission arrangement
• Agreed release conditions and milestones
• Expected timetable for verification, delivery or completion

Providing this information clearly and early helps ensure the account can be opened without unnecessary delay.

The following information is typically required to open an Art Purchase Escrow account:

• Details of the buyer and seller, gallery or artist
• Identification information for authorised individuals
• Corporate or estate documents showing ownership and control, where applicable
• Source of funds information for the escrowed amount
• Summary of the sale or commission arrangement
• Agreed release conditions and milestones
• Expected timetable for verification, delivery or completion

Providing this information clearly and early helps ensure the account can be opened without unnecessary delay.

Payments from an Art Purchase Escrow account are made only when the agreed release conditions are met.

These conditions are set out in the escrow agreement and may include confirmation of authenticity, completion of provenance checks, delivery of the artwork, or completion of agreed stages in a commission.

When a release request is made, we check that the agreed conditions have been satisfied before releasing funds in line with the escrow agreement.

If instructions are disputed or unclear, we will not release the funds.

Instead, the funds remain held safely in the escrow account while the parties follow the process set out in the escrow agreement. This may involve clarification, confirmation from an agreed third party, or the use of the dispute resolution process under the underlying contract.

This approach protects both parties. It ensures that money is not released prematurely and that funds remain available once the position is resolved.

If a party to the underyling contract becomes insolvent, we continue to operate under the escrow agreement.

Because the funds are held in escrow and not in the control of either party, they are protected from being used for other purposes. We will follow the agreed instructions and any applicable insolvency process, as set out in the escrow agreement.

In practice, this can provide greater certainty than relying on funds held directly by one of the parties, particularly where payment timing or entitlement is being considered as part of an insolvency situation.

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What happens if DOS & Co. becomes insolvent?

All escrow funds are segregated (kept separate from our own funds), safeguarded (protected by law from our own creditors) and kept liquid and unencumbered at the Bank of England. In the event of our insolvency, we have set aside regulatory capital that will be used by our administrators to 'unwind' our affairs - this will usually involve working with the parties to agree the identity of a new escrow agent who will 'step in' to carry out our obligations under the escrow agreement.

Funds paid into an escrow account are held separately from the money of the parties and separately from our own funds. They are not mixed with operational accounts.

All of our escrow funds are held liquid and unencumbered at the Bank of England. This means that there is no counterparty risk (the bank does not lend out funds, so a 'run on the bank' is not possible).

The escrow account is set up specifically for the purposes agreed in the escrow agreement. Funds can only be used in line with that agreement and cannot be applied for any other purpose.

This separation helps protect the funds if something goes wrong elsewhere. For example, the funds are not available to the creditors of the Employer, the Contractor, us, or the underlying bank. They remain ring-fenced for the project until they are released in accordance with the agreed conditions.

We are regulated by the Financial Conduct Authority for the provision of payment services. This means we are required to meet regulatory standards around governance, systems, controls and the handling of client funds.

Where escrow arrangements involve regulated payment activity, those activities are carried out within that regulatory framework. Other aspects of escrow are contractual in nature and governed by the escrow agreement between us and the parties.

In practical terms, this combination of regulation and contract provides structure and oversight, while still allowing escrow arrangements to be tailored to the needs of a specific matter or project.

Escrow is designed to hold, protect and release funds in line with agreed conditions. It does not decide who is right or wrong in a dispute.

We do not interpret the underlying contract, assess the quality of anything done or delivered under that underlying contract, or replace the role of a contract administrator, adjudicator or court. If there is a dispute, the funds remain held while the parties follow the agreed dispute resolution process.

The escrow arrangement also does not remove the need for a properly drafted underlying contract. It supports that contract by providing a clear and neutral payment mechanism, but it does not change the parties’ underlying rights or obligations.

Escrow pricing depends on the structure, value and duration of the escrow arrangement. There is no single fixed fee, as projects and payment flows vary.

Pricing usually reflects three main elements. First, the work involved in setting up the escrow arrangement, including compliance, onboarding and preparation of the escrow agreement. Second, the ongoing administration of the escrow account while funds are held. Third, the handling of payments or releases during the life of the project.

What pricing covers is the independent holding of funds, administration of agreed payment mechanics, record-keeping, reporting, all bank fees and support throughout the project. It does not cover legal advice, contract administration or dispute resolution, which remain the responsibility of the parties and their advisors.

If something goes wrong, the escrow arrangement provides a clear framework for dealing with it.

If there is a mistake, delay or disagreement about instructions, funds remain safely held in escrow while the issue is addressed. We follow the process set out in the escrow agreement and do not release funds unless and until the agreed conditions are met.

If a party has a concern about how the escrow account is being operated, we have a formal complaints process. This allows issues to be raised, reviewed and resolved in a structured way, with escalation routes available if needed.

We are a specialist provider focused on escrow and managed payment arrangements. Escrow is not an add-on to another service. It is a core part of what we do.

Escrow funds are held securely and separately, with infrastructure designed specifically for escrow rather than adapted from other uses. Account opening is handled efficiently, and escrow arrangements are administered through a dedicated digital escrow portal, giving authorised parties visibility and a clear audit trail.

Advisors often recommend dospay because we sit independently of the transaction, operate within a regulated framework, have a proven track record and focus on doing one thing well: Holding and administering escrow funds in a clear, neutral and predictable way.