Most home lenders today are very particular about the wording of shared well agreements, especially when there are five or more home homes sharing a single well. If there are five or more homes on a single shared well, lenders prefer that the shared well is registered in either a co-op, or a non-profit limited liability company (LLC).
Several key steps should be followed before putting your shared well into an Arizona Limited Liability Company.
First, the shared well and surrounding easement must be professionally surveyed.
Second, the Arizona limited liability company must be formally created with the Arizona Corporation Commission.
Creating and maintaining the company raises a whole host of issues. For example, how will the company be organized? Who is going to manage the company? Who is going to be the members? When a property is sold and ownership transfers hands, not only will the shared well agreement need to be amended but now so will the company.
If you need help from an experienced Arizona water law attorney, then contact the Dunaway Law Group at 480-702-1608 or message us HERE.
* The information provided is informational only, does not constitute legal advice, and will not create an attorney-client or attorney-prospective client relationship. Additionally, the Dunaway Law Group, PLC limits its practice to the state of Arizona and New York.