Is it Possible to Cancel a Shared Well Agreement?
We are asked on a regular basis how shared well agreements can be cancelled. Before addressing the question of how shared well agreements are cancelled, let’s first briefly explore how shared well agreements are created.
A shared well agreement is a contract regarding the drilling, maintenance, and use of a water well between multiple users. The agreement identifies Parties, properties, well location and water distribution system, maintenance liabilities, and easements.
Parties are identified by their full legal names. The properties, well, and easement locations subject to the agreement must be identified using valid legal descriptions and a diagram showing the locations of the well and distribution system attached as exhibits. Failure to properly the terms of use and maintenance liabilities can lead to future misunderstandings and disputes. Additionally, a shared well agreement should be both notarized and recorded with the county recorder’s office.
Shared well agreements are simply contracts entered into by people sharing water from the same well. Like most contracts, these well share agreements can be modified, amended, or terminated once corresponding rules are met.
A professionally drafted shared well agreement will explain the process of amending or cancelling an existing agreement. They will often say something like, “This agreement can only be modified in writing and with the approval of a majority of the parties.” Or, the contract might require unanimous consent by all of the Parties.
shared well agreements “run with the land”
“Running with the land” refers to the rights and obligations in real estate that remain with the property regardless of who owns it. These rights and obligations are tied to the property and not to the owner and so they stay in place as the land is transferred from one owner to another and so a property owner cannot simply say, “I’m going to cancel the agreement”.
The importance of this means that an Arizona property owner who purchases a home with a shared well is obligated to abide by the well share agreement even if they did not sign it!
Lastly, remember that the Arizona Department of Water Resources does not regulate shared well agreements. Therefore, it will not become involved in interpreting or enforcing the agreements. So make sure that your shared well agreement is professionally written because if there are errors, if some topics are vague or ignored, it can create a lot of problems in the future.
The Dunaway Law Group drafts and amends shared well agreements. If you are looking to draft a new agreement or make modifications to an existing shared well agreement then contact us at 480-702-1608 or Clint@DunawayLG.com.
* These blog posts are not intended, nor shall they be deemed to render legal advice. Reading these blog post does not create an attorney-client relationship, nor shall it impose an obligation on the part of the law firm to respond to further inquiry.