Type 2 Water Rights

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Arizona’s Type 2 Water Rights: A Valuable and Flexible Asset

In the arid landscape of Arizona, water rights are a crucial commodity. While various types of water rights exist within the state, Type 2 non-irrigation grandfathered rights hold a unique position due to their flexibility and potential for economic benefit.

What are Type 2 Water Rights?

Type 2 water rights were established under the Arizona Groundwater Management Act of 1980. They are granted to individuals or entities that were using groundwater for non-irrigation purposes between 1975 and 1980. These rights are not tied to specific land, meaning they can be sold, leased, or transferred independently from any property. This flexibility distinguishes them from other types of water rights, which are often appurtenant to specific parcels of land.

How Can Type 2 Water Rights be Used?

The non-irrigation purposes covered by Type 2 rights are broad, encompassing a wide range of uses such as:

  • Industrial: Manufacturing, mining, and other industrial processes.
  • Commercial: Golf courses, resorts, and other businesses.
  • Municipal: Supplying water to towns and cities for drinking and other purposes.

This versatility makes Type 2 rights a valuable asset for a variety of users, particularly in areas with high demand for water resources.

Benefits and Considerations of Type 2 Water Rights

Type 2 water rights offer several advantages, including:

  • Flexibility: The ability to transfer and use these rights independently from land provides greater freedom for owners and lessees.
  • Economic Value: The scarcity of water in Arizona, coupled with the flexibility of Type 2 rights, makes them a potentially lucrative asset.
  • Diversification: Owning Type 2 rights can provide a way to diversify an investment portfolio.

However, there are also some important considerations:

  • Regulatory Framework: Type 2 rights are subject to the regulations of the Arizona Department of Water Resources (ADWR), and potential buyers or lessees should be aware of these requirements.
  • Water Availability: The availability of groundwater can vary depending on location and other factors, impacting the value and usability of Type 2 rights.
  • Long-Term Sustainability: Responsible management and use of groundwater are essential to ensure the long-term sustainability of this resource.

Conclusion

Arizona’s Type 2 water rights are a unique and valuable resource within the state’s complex water management system. Their flexibility and potential for economic benefit make them an attractive asset for a variety of users. However, understanding the regulatory framework and the importance of sustainable water management is crucial for anyone considering acquiring or using Type 2 water rights.

If you need help from an experienced Arizona 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 states of Arizona and New York.

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Author: Clint Dunaway

Arizona attorney.