Well Share Agreements Archives | Dunaway Law Group, PLC

How To Cancel Well Share Agreement

Is it Possible to Cancel a Shared Well Agreement?

Frequently clients ask how to cancel a shared well agreement. In order to understand how well share agreement can be terminated it’s best to understand how they 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 [email protected]

* 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. The Dunaway Law Group limits its practice to the State of Arizona.

Buying a House with a Shared Well

When buying an Arizona home with a shared water well, there are certain considerations to keep in mind. Many homebuyers have questions and concerns about shared wells when they’ve never lived in a house that shares a water well. By definition, a shared well is a water well that services two or more homes for residential purposes.

If you are consider buying a home that has a shared well, there are a few important things to keep in mind:

Is there an existing shared well agreement? Is it up to date? Accurate?
What are the monthly operating costs?
Are there any built-in contingencies for remediation, repairs, maintenance, and quality testing?
Are there any restrictions placed on your system? For instance, does the shared well agreement prohibit the use of swimming pools? Or does it prohibit
Are there records of periodic inspections and repairs?

inspect the well prior to the purchase

A well inspection is not a legal requirement to purchase a home but

It is important to note, that Arizona home inspectors do not conduct inspections of water wells. They inspect every square inch of the home but not the well. Therefore, the well could have serious problems and you would never know!

It is imperative that a shared well is functionig properly, otherwise dozens of people may be without water!

Here are a couple of things you should find in your shared well agreement:

Specification of the cost involved to share your pump in regards to power, repairing, testing and inspecting.
Requirement for corrective courses of action if testing reveals a deficiency.
Prohibit the use of the well water by any party for any reasons other than for bona fide domestic usage.
No additional residences may connect and use of the water.

disclosure forms provided by AZ realtors

The Arizona Association of Realtors as a trade association has enacted standards for the management of all exempt wells in the state of Arizona during sales and transfer of real estate. This fantastic idea is being done by the Realtors association without authorization by the Arizona Legislature or ADWR.

The Arizona Realtors group has authorized and put into place two forms that all Realtors must use to inform buyers of real estate served by private water wells. They must be used for each transaction involving private or shared water wells. They are the Domestic Water Well Addendum and the Domestic Water Well Water Use Addendum Seller’s Property Disclosure Statement. They promulgated these forms because it is essential information necessary for the protection of the health, safety, and welfare of home buyers relying on exempt wells.

The first, the addendum, must be signed by both the seller and the buyer. This informs the buyer that the Arizona home is supplied with water from a residential water well. The second form, the disclosure statement, provides the buyer with the best detailed information about the well that the seller can provide. Most well owners are not familiar with the information requested on the form. The “best information that the seller can provide” is what a buyer gets from this form.

prepare early to avoid delays in closing

A proper shared well agreement requires the signatures from the owners of each property that will be receiving water from the well. Hammering out the details of the agreement can be an incredible hassle. Sometimes a homeowner will dig in their heels over a certain provision. The back and forth can cause the sale to be delayed if the parties do not plan accordingly.

the importance of maintaining proper shared well records

Shared well agreements and their records can often become more and more innacurate. New owners will began accessing the well without written record or the parcel size / shape is changed because it has been split.

If you are looking to draft a new shared well agreement or make amendments to an existing shared well agreement, then contact us 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.

Well Share Bank Account

Traditionally, the parties to a well share agreement have a joint checking account used specifically for paying the well electricity and repairs. Usually, each property owner pays a flat amount to cover the cost of the electricity and to set aside money for repairs.

A well share bank account can help the parties save a little each month to cover the cost of expensive repairs.

1. Pay the Electricity Costs for the Well

Electric pumps are typically used to bring water to the surface. Traditionally, there is a single electricity meter attached to the pump. This means that it is easy to know the monthly electricity bill, however, it does not tell you how much electricity was used by a particular homeowner. This is why most most well share agreements require each homeowner to pay a flat amount of electricity.

2. Save for Major Repairs to the Water Well

The second major reason homeowners use a joint checking account is to set aside a little money each month for major repairs to the well. With this nest egg, no one is left scrambling to come up with the money.

Major repairs may include replacing a pump, fixing a leak, or even drilling a well deeper.

Open the Bank Account Now– Even if the well share agreement is not finalized it is not too early to open the shared bank account.
Specific Purpose– The well share bank account should not be used for any other purpose than maintaining the water well.
Equal Access to the Bank Statements– Ask the bank to send a statement to each homeowner. This way, every homeowner can verify that the electricity bill is being paid and how much money has accumulated in the account.

Failure to Properly Identify the Terms of Use and Maintenance Liabilities Can Lead to Future Misunderstanding and Disputes

contact the dunaway law group, plc

For assistance with your water well contact us by phone at 480-702-1608 or message us at [email protected]

These blog posts are not intended, nor shall they be deemed to be the rendering of legal advice. Reading these blog posts does not create an attorney-client relationship, nor shall it impose an obligation on the part of the attorney to respond to further inquiry. The Dunaway Law Group limits its practice to the State of Arizona.

Registering Water Wells

Arizonians must register their water wells with the Arizona Department of Water Resources (ADWR). Registering a water well with the ADWR is a fairly straightforward process as described below.

WELLs must be REGISTered with the adwr

The Arizona Groundwater Management Act of 1980 mandated that all property owners register their wells with the newly formed Arizona Department of Water Resources (ADWR). All wells, public, domestic, agricultural, mining, etc. were to have been registered with ADWR and accounted for during the early 1980’s. A large majority of the wells were registered by 1985. Since that time, however, many of the properties where these wells are located were sold and transferred without informing ADWR there was a change of property owner.

The recording of a deed of title transferring the real estate does not notify ADWR that the well ownership has been transferred. Therefore, there are many registered wells in Arizona that are still listed with ADWR as being owned by the person who first registered the well in the 1980’s.

REGISTERING a WATER WELL

If your water well is not registered in your name, you may not have a known or definable source of water for your home. Arizona does not consider groundwater to be private property belonging to the landowner. Exempt well water rights are more like an operating permit to withdraw a state managed natural resource.

Additionally, if a well is not registered in the owner’s name then the Arizona Department of Water Resources cannot notify you of pending changes in groundwater law that may affect you water rights.

In Arizona, private well owners are left strictly on their own to manage and protect their water well. There are no standards for the performance of private or shared water wells during the sale and transfer of the real estate upon which the well is constructed.

Therefore, keeping your well records current with the ADWR and up to date for your own personal use is important to protecting your domestic water well and it is important to have your well information current and accurate for maintaining your water rights and for any future real estate sales or refinancing transactions. Furthermore, buyers and lenders will be asking for it.

VERIFYING THE REGISTRATION OF A WATER WELL

The first thing that any private well owner should do is check with the Arizona Department of Water Resources to see if the well is registered in their name. You can do this by logging on to the ADWR web site and searching its “Imaged Records“.

ADWR Forms Mandated by A.R.S § Title 45

Form DWR 55-71A can be used to correct or change well location information, the registered well owner’s name and address, the name of the well drilling company to be used to drill or deepen the well, or any other pertinent information about the well.

Arizona escrow officers will often use this form to record a transfer of well ownership with the Arizona Department of Water Resources at the time of escrow closing.

LOCATING WELL RECORDS

There are three basic ways to locate Arizona water well records. You can access well file data in the ADWR Imaged Records database the following ways;

1. Using the well registration number (55-000000), 2) by entering the file or cadastral (registry of real state property) designation of your well, or 3) by finding and clicking on a red dot a topographic map of the state of Arizona where your well is located. After locating your well records, you can download them in a pdf file format.

The first step is logging on to the ADWR web site as explained below. Log on to the ADWR Home Page and scroll down to Quick Links: and click on the Imaged Records logo, which will direct you to a page with a box named Search ADWR’s Imaged Records. Change the Imaged Record: field from “Groundwater Document” to “Well Record Document” using the scroll down menu on the right.

WELL LOCATION CADASTRAL

Finding a well’s location by the Cadastral: You can enter the cadastral location of your well in the Location box under Image Record drop down of Well Registry or Wells 35 document. The steps below illustrate how to enter the location of a well located in Section(S) 21 of Township (T) 13South (S) and Range (R) 15West (W), which is usually abbreviated: S21, T13S, R15W.

An alternative way to locate the records of a particular well is to use the ADWR Home Page. This will direct you to an image of a topographic relief map of the State of Arizona. If you choose the Wizard method, you are given three choices of methods to search for your well records, Well Registry number, Owner Name Search, Location Cadastral, Basin or Sub Basin.

If you choose the Map method of searching, you will see a map of the State of Arizona with tens of thousands of little red dots that indicate the approximate location of a registered well. You can zoom into a location on the map and when you have located your well, click on the red dot and this will open the imaged record file.

steps to registering a well

First Step to Register a Water Well– The first step to registering a water well is to visit Change of Well Ownership (azwater.gov) and enter the well’s 55- number.
Second Step to Register a Water Well– The second step to changing well ownership is to provide the new owner’s name and contact information.
Third Step to Register a Water Well– The third step to registering a water well is to provide proof of ownership. Lastly, you must pay a $30 fee.

If you need assistance with an Arizona water well then contact the Dunaway Law Group at 480-702-1608 or message us HERE.

Benefits of Shared Well Agreements

The benefits of an accurate and professionally written shared well agreement are endless. A well written (pun intended) well share agreement decreases the odds of disputes and give you peace of mind. It provides certain assurances that their interests will be protected.

Over the years, I have spoken to literally hundreds of Arizonians with some type of dispute regarding a shared well. A common variable in this situation is a poorly written shared well agreement or none at all.

Every situation is different, every property is different, every well is different, and this is why we create custom agreements for each client. In addition to providing advice on the general issues we also provide advice on more nuanced issues. For instance, what about swimming pools? Will they be allowed? Must each property owner install an individual water flow meter to track their usage? Will a joint bank account be established to pay the well utilities and save for major repairs? Should vacant land-owners still pay for costs and repairs even when not drawing water from the well? What about someone who no longer wants to draw water from the well? Must they continue paying for repairs?

Sharing water wells with neighbors can be complex and lead to potentially messy relationships. In Humphries v. Becker, the parties entered into a Shared Well Agreement, but did not properly identify the well. The property was conveyed to a purchaser who, based on representations of the seller, believed that the well subject to the Shared Well Agreement would be sufficient to provide water to both the house and their irrigation system. In reality, the well serving the irrigation system was on a farmer’s adjacent property and was only used with his permission. The farmer cut off the irrigation water usage when a conflict arose between the purchaser and the farmer. As a result, the purchaser sued the seller for misrepresentation. The original parties’ failure to sufficiently identify the well in the Shared Well Agreement caused the seller to incur the expense of costly litigation that could have been avoided. Humphries v. Becker, 159 Idaho 728, 366 P.3d 1088 (2016).

benefits to the well owner- “grantor”

It gives the well owner an enforceable contract against the Grantees that they pay their portion of the maintenance, repairs, water and electricity. Grantors have an enforceable contract that requires the Grantees to pay their equal share of well maintenance, repairs, water and electricity.

benefits to the recipients- “grantees”

Shared well agreements provide Grantees–those receiving the water–with a legal right to draw water from the well. Without a written shared well agreement, a well owner could deny access to a Grantee. The Agreement is the only assurance Grantees have with a legal right provided in the agreement.

A Grantee might think, “I do not need a formal or accurate shared well share agreement because I’m friendly with my neighbors and we all get along.” But what if those friendly neighbors move? Will you still have a legal right to the water? Remember, without a shared well agreement, the well owner has no legal obligation to share the well water with you.

inacurrate well ownership information

Well ownership must be updated with the Arizona Department of Water Resources each time the land containing the Well has a new owner. The well ownership records must be updated with the ADWR by submitting forms and paying a fee. Often a property will be sold many times without the new ownership information being submitted to the ADWR.

A PERSON TO WHOM A WELL IS REGISTERED MUST NOTIFY THE ARIZONA DEPARTMENT OF WATER RESOURCES (ADWR) OF A CHANGE IN OWNERSHIP OF THE WELL AND THE NEW OWNER MUST FURNISH INFORMATION AS REQUIRED BY ADWR TO KEEP WELL REGISTRATION RECORDS CURRENT AND ACCURATE.
A.R.S. 45-593(C)

Verify Well and Parcel Information

The first step in creating an excellent well share agreement is to verify the accuracy of all the relevant information. I’m amazed at how many errors we find when amending or re-drafting an Agreement and it is full of errors. If the information in an Agreement is incorrect, then it can create real headaches for everyone involved.

Verify Well Ownership Records with the ADWR

The Arizona Department of Water Resources (ADWR) requires that each Well is registered in the name of the current owner. Often, this information is outdated, as properties are sold but the ADWR is not notified. Simply purchasing a property and recording the deed with the county recorder does not notify ADWR that the Well ownership has been transferred. The new owner must take the overt steps of registering the Well in their name. We verify that the well ownership information is correct.

Verify the Assessor’s Parcel Number (APN)

An Assessor’s Parcel Number, abbreviated as APN, is a unique descriptor used by each county to identify assessed real property. The APN includes information about the ownership, characteristics, and valuation of each piece of land that is reordered and tracked by parcel number.

While a property can only have one APN at a time, APNs change on a fairly regular basis as parcels are merged, split, or subdivided. We make sure that the correct APNs are used.

Verify the Legal Descriptions.

Occasionally we find errors in the legal descriptions used to have create a former/current shared well agreement. We verify that the legal descriptions are correct.

The Agreement is Reviewed and Recorded

Once the Agreement has been approved and signed by all Parties, we record it with the county recorder. Recording the Agreement reduces the odds of someone later challenging the veracity or accuracy of a shared well agreement. We then take a copy of the recorded agreement and provide it to the ADWR to save in the Well’s permanent file.

latecomers to the shared well agreement

Occasionally, when a new home is built on a previously empty lot the shared well agreement is not updated to reflect the new user. Ideally, when a parcel is sold, the original shared well agreement is re-written. Some of the benefits of rewriting the shared well agreement.

First, the buyer’s names are actually written into the agreement and their signatures reflect their personal acceptance of the WSA. Additionally, there is a psychological benefit to drafting the latecomers into the agreement. This way, they are personally committing themselves to the agreement versus just referencing something that someone else agreed to.

Second, when re-drafting the agreement, you can make adjustments to it. For instance, maybe you want to prohibit certain actions like filling a swimming pool or watering fruit trees. Maybe the property owner wants to increase or decrease the amount of money paid into the reserve bank account.

WATER WELL maintenance schedule

Create a maintenance schedule. Proper maintenance of the well and its components will make it last longer and ultimately save the Parties money.

If you need help from an experienced shared well attorney, then contact the Dunaway Law Group at 480-702-1608 or message us HERE.