Should Artists Pay to Exhibit?

I went along to an artists preview of a lovely new gallery space under construction in a so far gallery-less town on the South Coast. The space is in a historic building on the Seafront by the centre (but not in the centre) of town. The gallery itself looks like it will be smart - making use of the iron framework of the recently renovated Edwardian building with stripped back bricks, studio lighting and illuminated plinths.

The Gallery will be owned by the cafe and caterers who occupy the other unit in the building and run the impressive function rooms upstairs. The owners haven't any experience in the arts but are enthusiastic, want to make a quality and interesting gallery and are employing a consultant for advice and to initially source artists.

All well and good until I looked at the contract - 40% commission which seemed fair for a town not renowned for art appreciation or buying, however there was also an administration charge of £5 per item (refunded if the work sold) and a daily hire charge of £1 per item (refunded if the work sells).

Therefore if an artist exhibits 5 paintings for a month and sells 2 at £200 each then the artist would receive a reasonable £240 in commission for the paintings, but would owe the gallery £105 for the 3 unsold paintings.

I've been told (by the consultant) that many galleries operate this sort of arrangement and that it is the only way a gallery in this sort of location would be "sustainable". We personally haven't come across this sort of arangement in 15 years of exhibiting - we have hired venues occassionally but this was a hire charge and we kept all the proceeds. This contract seems to be the equivalent of a "each way bet" whereby the gallery gets paid whether or not the artwork sells.

Could someone tell me whether this is a common type of contract? have they come across it before? and if so have they had good experiences of it? Have I missed any advantages to the artist? or should artists support this contract as the price of getting a (hopefully) decent gallery in a galleryless town?

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