The physical land you're looking to buy isn't the only thing you should be inspecting during your first tour of the property. Just under the surface could lie a large water reserve, which can greatly impact the value of the land and the way you inevitably make use of your property should you decide to purchase.
In essence, there are two types of water that affects landowners: groundwater and surface water. While surface water typically comes in the form of a pond or stream, your interests may in fact lie deeper under the ground.
Groundwater is also a key aspect you must keep in mind when buying land because it could be the way you access water for plumbing and drinking. These two water types also have distinct rights associated with them, for which you need to be aware of prior to signing on the dotted line.
Water rights are a complex issue that many landowners have difficulty understanding without the help of a professional. And because federal, state and municipal laws apply in every region, wading through the specifics of staying compliant with the law can be time-consuming.
Knowing your basics
Water rights are determined by how the water is inherently being used. Because every state experiences different weather conditions and contain different ideologies regarding the use of water, the laws differ greatly. For instance, some states effectively treat surface water and groundwater as the same thing, which gives landowners more leeway in the right to exercise their use of water as they see fit. On the other hand, states that are more arid and are susceptible to droughts typically have more stringent laws, and landowners must seek approval from the state government before asserting their right to water.
Water rights can change rapidly over time, however, rights that are considered most senior usually supercede more junior rights during disputes. Managing Broker at Mossy Oak Properties Colorado Mountain Realty in Divide, Colorado, Bob Regester noted appropriation dates prior to 1900 are considered senior, while those after 1900 are junior.
The date that an owner is granted water rights is known as the appropriation date, and other users of the water must defer to the rights of the original appropriator.
Further the rights between groundwater and surface water are also regulated more heavily in states that deal with scarcity, particularly those in the West.
"In most all cases, if the land has surface water, the water rights are not available as most are owned by municipalities in multiple states for their city water," said Regester. "You may not dam or divert from a stream or use it for your home. You can fish, wade or let your animals drink from it - and that is usually the only water use you would have."
The only way to know for certain whether you have water rights is to check the deed and speak directly with a state official just in case. A professional can help support you in this endeavor, as many times, water rights may have been previously abandoned on your land.
Water rights during a sale
When buying land, you'll want to make sure all information regarding water rights is fully disclosed. Luckily, water rights can be transferred upon the sale of the property and barring the use of the water still remains in tact.
Regester pointed out water rights are transferred via a quickclaim or special warranty deed. In general, water that has an earlier appropriation date is much more valuable and will make the property more expensive to purchase.
You should also look into drilling rights, as certain wells can be drilled under close state supervision. Wells that produce higher levels of water are inherently more valuable. In some areas, like Colorado, drillers have a 90 percent success rate of hitting water, according to Regester.
Knowing the history of well production in the area can help you get a better gauge on just how much your groundwater rights may come into play. Before buying, a broker can gather information about neighboring properties and let you see how other owners are using their water rights and for what specific purpose. This knowledge can help you become more confident in your decision to close the deal, on which water rights are transferred immediately.
"It is important for a buyer to check well production rates of neighboring properties with wells in place," Regester stated. "If a buyer is purchasing a property with a well, they should have it tested for production rate and quality of potable drinking water."
Water rights should be taken very seriously, especially considering water is the most precious resource we have. As such, not staying up to date on your rights and the details of those rights cannot only diminish the value of your land and get you in trouble with state authorities, but can also lead to certain health risks.
Water should be tested for excessive contamination and presence of minerals. Water that is high in bacteria can serve little purpose if it is not properly cleaned and chlorinated.
The key is to be aware of your local laws and prove the use of your water is in accordance with all regulations.
Further, certified land specialists from Mossy Oak Properties can help you understand and obtain water rights. Additional assistance can be sought from water attorneys and municipal regulators.