Water rights play a vital role in real estate transactions, especially when it comes to properties with access to water resources. Regardless of if you’re considering purchasing a riverfront cabin, a luxury waterfront residence, or recreational tract with several private ponds, understanding water rights and evaluating all water rights considerations is essential for navigating the complexities of owning a recreational property with water access.
What are Water Rights?
Water rights pertain to the legal permissions allowing individuals or organizations to utilize water from sources like rivers, lakes, ponds, or aquifers. These permissions delineate the users, the permissible quantity of water usage, and the intended purposes. Water rights may be linked to particular land parcels or assigned independently of land ownership. There are a few different types of water rights:
Riparian Water Rights
Riparian rights stem from the principle that property owners adjacent to a water source are entitled to utilize that water for reasonable and beneficial uses. Commonly linked with properties along rivers, streams, and other water bodies, these rights permit owners to engage in activities like fishing, swimming, and irrigation systems, provided they do not impinge upon the rights of fellow riparian property holders.
Prior Appropriation Water Rights
Prior appropriation rights, also known as "first in time, first in right," govern water allocation through the principle of priority use. In this framework, the first individual or entity to utilize water for a beneficial purpose secures the most senior water rights, thus holding precedence over subsequent users. In other words, the person or entity that first established a claim to the water source has the most senior water right and is entitled to use the water before anyone else. This system is prevalent in arid regions, where it is typically linked with irrigation and agricultural activities.
Eastern vs. Western U.S. Water Rights
In the eastern United States, the riparian doctrine governs water rights, granting landowners the ability to reasonably utilize water bodies—like streams, lakes, ponds, or rivers—bordering their property. This "reasonable use" principle permits the use of water as long as it doesn't impede another downstream landowner's rights to similar reasonable use. Reasonable uses may include irrigation, providing water for livestock, or personal consumption.
To regulate this, most eastern states have adopted a government-controlled riparian system. Individuals or corporations seeking to use water must secure a permit from a state authority, detailing their intended use. The state then assesses whether the proposed use meets the criteria of reasonableness before issuing a permit.
Conversely, states west of the 100th meridian largely adhere to the doctrine of prior appropriation for water rights. This system, established in the 19th century to accommodate the influx of settlers to the western territories, operates on a "first in time, first in right" basis. It grants individuals who first divert a water source for beneficial use the ongoing right to utilize and divert that water, prioritizing their rights based on the chronology of use.
Water Rights Considerations & Recreational Properties
When you own or are interested in purchasing a property with water amenities, understanding the water rights associated with the property is crucial for several reasons:
Access to Water: Water rights determine your legal ability to access and use the water for fishing and other recreational activities. Knowing the extent of your water rights ensures that you can enjoy uninterrupted access to the water resources on your property.
Water Quality: Water rights can also influence the quality of fishing experiences. Properties with senior water rights may have more reliable access to water, leading to healthier aquatic ecosystems and better fishing opportunities.
Property Value: The presence of secure water rights can enhance the value of a recreational property. Property buyers or prospective lessees are often willing to pay a premium for properties with established water rights, as it provides assurances regarding the availability of water for recreational use and other purposes.
Regulatory Compliance: Water rights fall under the jurisdiction of state agencies and water management districts, whose regulations must be understood to ensure legal compliance and prevent conflicts with adjacent water users.
Water rights rules and regulations vary state-by-state and by the specific type of water rights, so property owners must work with a local land professional or an attorney familiar with water rights to ensure compliance.
How to Sell or Lease Recreational Properties and Water Rights
Recreational properties with water rights are more valuable for sale and lease than those without water rights. When determining the value of a recreational property for sale or lease, it is important to take into account the presence of water rights (or the lack thereof). LandGate provides property owners with a free property report that breaks down the value of their property and its resources:
If you are interested in selling or leasing recreational land, consider listing it on LandGate's open marketplace. Listing is free, and there are no commission fees or obligations to accept any offers that you receive through a listing:
