When buying land, one of the most important things to consider isn’t just the land itself but also the water rights that come with it. Water rights can greatly impact the value and use of the property, especially if you’re looking at land with a valuable water source.
Without knowing how water rights work, you could end up in criminal or financial trouble down the track.
So, let’s break it down.
What are water rights, do you need them, and how does land ownership tie into this complex web of criminal and environmental issues?
What Are Water Rights?
In simple terms, water rights are the legal entitlements that allow people or entities to take water from a specific source, whether it’s a river, stream, pond, or underground aquifer. Importantly, those rights don’t mean you own the water itself. Instead, they permit you to take it in a specific way under certain conditions.
Water is often one of the most valuable assets on any property and since it is governed by different state and federal laws, landowners need to understand how they can use it.
Water rights can come in many forms depending on the location and whether you’re dealing with surface water (water that flows on the surface like rivers or lakes) or groundwater (water underground in aquifers). Knowing whether your land has the right to use water from these sources is important before you buy.
Types of Water Rights: Riparian vs. Prior Appropriation
Water laws vary from state to state but there are two main systems in the US that govern how water is allocated—riparian rights and prior appropriation. Understanding these systems will help you work out what rights you have as a potential landowner.
Riparian Rights
If you’re buying land in a state that follows the riparian doctrine, you, as a property owner, are entitled to take water from a water body (like a river or lake) that flows through or is adjacent to your land. Riparian rights are generally available to property owners who live near surface water sources.
The key principle of riparian rights is that you can use the water for “reasonable” purposes that don’t harm the water quality or access of others downstream. However, riparian rights are generally limited to a “reasonable” amount of use and if the water source dries up or becomes scarce, your access to it may be reduced.
In areas governed by riparian rights, water is generally considered part of the land so if you own the land, you have access to the water on or adjacent to it. The rights are tied to the land itself, not the person who owns the land.
Prior Appropriation
On the other hand, states in the western US, which are more water-scarce, follow the doctrine of prior appropriation. Under this system, the right to use water is determined by the date the water was first used.
This principle is often summarized as “first in time, first in right,” meaning the earliest user of the water has priority access when supplies are low. Prior appropriation can also apply to both surface and groundwater, with the amount of water that can be diverted and used regulated by state agencies.
Under prior appropriation, a landowner can divert water from a stream or river but they must prove the water is being put to beneficial use such as irrigation, municipal use, or power generation. If you live in a state with prior appropriation laws, you must follow a specific permitting process and prove you’re using the water efficiently and for beneficial purposes.
Do You Need Water Rights?
Whether you need water rights when buying land largely depends on what you plan to do with the property and where it is located. If the land you’re buying has a natural water source – whether a stream, river or well – knowing what water rights come with it is key.
If you’re in an area with surface water or groundwater, it’s important to find out if the land includes rights to these water resources. Without these rights, you may not be able to use the water for irrigation or even personal use.
Water users in some areas may have access to water via the riparian doctrine, but in many other states, especially in the West, you may need to go through the legal process of acquiring prior appropriation rights.
In some cases, water rights can be transferred separately from the land itself. You could buy land without water rights or the previous owner may have already sold or leased the rights. This could greatly reduce the usefulness of the land if you need to access water for any purpose.
Does the Land Come with Water Rights?
This is a common myth. Just because a piece of land has a stream or well on it doesn’t mean the water rights automatically belong to the landowner. In fact, in many cases the water rights may be held by someone else – a government agency, municipality or even a neighboring property owner.
Before you sign the papers to buy the land, you need to make sure you fully understand what water resources are available and what water rights come with the land.
Water rights can be sold or leased separately from the land. This means you can buy water rights separate from the land and in some cases, water rights can be a highly valuable asset. Landowners in areas where water is scarce can sell or lease their water rights to others so water rights are part of the transaction process for both buyers and sellers.
The Permitting Process: How to Get Water Rights
Getting water rights involves a permitting process, which can be complex, especially in states with strict water laws. Whether you’re dealing with prior appropriation or riparian rights, you may need to apply for a permit to use water from a specific source. This process varies by state and type of water.
For surface water, you may need to prove your use is beneficial and won’t harm the water quality or deny access to other users. In some cases, especially in western states, you may need to get permission from the state or federal government agencies before you can use water from a stream or river. This can be a long and expensive process so plan ahead.
Water Quality and Water Rights
Water quality is a key part of managing water rights. If you’re using water from a well or stream, you’ll want to test the water regularly to make sure it’s safe to use for irrigation, drinking or any other purpose. Poor quality water can harm your crops, livestock and health, so you need to be proactive in managing your water resources.
In areas where water is scarce, water quality can also be impacted by overuse. Water development and use should always be done sustainably. Many states regulate how water is extracted from stream systems and aquifers to ensure long-term viability. Knowing the history of water use in the area, including how neighboring properties are using water and for what purposes, can give you valuable insight into whether the land you’re buying will be enough for your needs.
Water Rights During a Sale
If you’re buying land, you need to make sure water rights are fully disclosed as part of the sale. You’ll want to know if the land comes with water rights or if you need to apply for them yourself. Water rights can be transferred as part of the land sale or sold separately.
Do a thorough title search to find out the history of water rights on the property and make sure the seller has the legal ownership of the rights they claim.
When water rights are transferred, it’s usually done through specific legal documents, such as a general warranty deed, special warranty deed or quitclaim deed. If the land has senior water rights, these are more valuable and will increase the value of the land. Junior rights may not offer the same security if water becomes scarce.
Conclusion: Water Rights
Water is the most valuable resource on earth and its scarcity is becoming a bigger and bigger issue in many areas, especially in the West. Whether you’re buying land for agricultural use, residential development or investment purposes, you need to understand the water rights that come with it.
Research if the land you’re buying has surface water or groundwater rights. Also, understand if they’re prior appropriation or riparian rights.
In some cases, getting water rights can be a long and complicated process, but it’s essential to make sure you can fully use the land you’re buying. Always consult with experts to make sure you get the rights you need and don’t be afraid to ask for professional advice if you’re unsure how water laws will affect your land.
Water rights can make or break the value and usability of a property, so make sure you’re fully informed before making a purchase.