Water Well Journal
Issue link: https://read.dmtmag.com/i/543740
O btaining water for project development can be chal- lenging as regulators act to limit new appropriations and increasing demand puts pressure on available supplies. In many instances the only option is to purchase and transfer an existing water right. This is particularly true for projects located in basins closed to new appropriations that do not have access to a pub- lic supply, though it can also be true for projects expecting to be served by a public water supply. Many jurisdictions either require or are working on re- quirements for developers to demonstrate possession of an adequate and legal water right before they will issue plat approvals or permits. This trend is likely to continue, so it would behoove drillers and consultants who make their living connecting projects to water sources to gain a basic understanding of the water rights that are necessary to make those projects go. Available Does Not Mean Usable One of the first things to understand is the difference be- tween water that is physically available and water that is legally available. Just because water is present does not mean it can be used. By the same token, a legal right to use water only has value if the water is physically available. The lesson here is for any groundwater professional to know they should not move forward with a water supply project without a factual under- standing of the physical and legal availability of water. "Water right" is a catch-all term used to describe a full range of legal interests. Those interests can take the form of personal property, as with a pending application or permit. Such rights are sometimes referred to as "inchoate"—meaning the water has not been put to a beneficial use. There are significant limitations on inchoate rights that may affect their suitability for use in a proposed project. For exam- ple, the ability to sever title to an inchoate right from the prop- erty where the use has been permitted is commonly limited. This means that the water can only be used on that property. Once water has been used beneficially, the right is said to be perfected. Perfected water rights take on the character of real property and are considered appurtenant (belonging) to the place of use. Under state water codes these are usually identified by a certificate or license. However, many perfected rights predate state water codes and there may be no state-issued certificate. Such rights, called "vested rights" in some jurisdictions, are dealt with in different ways. Often such rights are memorialized in county records by a notice of appropriation or they may appear as "deeded rights." Another common term is "decreed rights"—referring to rights confirmed by court in an adjudication process. Some states, Washington for example, have enacted claims registries to document water rights that predate the state's permitting statutes. Unlike inchoate rights, most perfected rights can be sev- ered from title to real property, meaning they can be sold and transferred separately. Perfected water rights are appurtenant to land where they are used beneficially and the majority rule is water rights go with title unless specifically reserved in the instrument of conveyance (i.e., the deed, not the buy-sell agreement). In most jurisdictions this means if the deed is silent, all appurtenant water rights convey—which becomes important when purchasing a water right with the intention of changing its place of use. Buy-sell agreements for water rights are typically made contingent on approval by the regulating state agency. That process can take many months to complete. Thus, it's a good idea to record notice of the pending water right sale, to pre- vent a subsequent bona fide purchaser of the land from assert- ing ownership of the water rights based on a deed that fails to reserve them to the seller. Beware of Paper Rights A key question when evaluating the validity and extent of perfected water rights is the issue of relinquishment. Just be- cause you see a certificate does not mean the water right re- mains valid. Water rights are relinquished by non-use. There are two commonly recognized forms of relinquishment: forfeiture and abandonment. Forfeiture is statutory and is based on a fixed and unex- cused period of non-use. Not all states have a forfeiture statute. While the period of non-use varies, the basic rule is the same: Use it or lose it. Abandonment, which developed under the common law, occurs when non-use is coupled with intent. Intent to abandon can be expressed but is more often inferred from conduct. For example, allowing a conveyance system to fall into disrepair to the point where it cannot be used may be construed as intent to abandon. Another important point is many jurisdictions allow for partial abandonment. As part of any due diligence when PETER G. SCOTT WESTERN WATER LAW ALL WATER RIGHTS ARE NOT CREATED EQUAL It's important you understand the water rights around you. waterwelljournal.com 46 August 2015 WWJ