Utah Water Rights & Water Shares

WHAT ARE WATER RIGHTS?

Water rights are owned by the water user and so they don’t need to pay for any assessments, they own water and can use it for what it’s been approved for.

Water rights can have different amounts of rights to the water. For instance, one water right might give you one share per acre. Whereas, another water right may give you two acre feet. For example, one foot is one foot and one pound is one pound, however, one water right is not worth a set amount of water. For one person the water right might give them the right for two acre feet and for another person the water right night give them three acre feet.

As such, when buying water rights the first thing to do is determine how water is assigned to a particular water right. 

HOW CAN I BUY WATER RIGHTS?

There are two ways a person can buy Water Rights in Utah. 

First, is to buy it from the State of Utah. You have to figure out how much water you need. How can you ask for water right? How is the beneficial use of water determined? 

Second, you can buy Water Rights from an individual who currently owns the Water Rights. 

Under title 73 of Utah Code Water rights in the state of Utah considered real property created they entitle the owner to use divert and beneficial use water within the limits of the water right they are appurtenant to the land, they are attached to the land and the ownership transfers with the land, unless severed.

UT Code 73-1-10 Conveyance of water rights by Deed — (1) (a) A water right, whether evidenced by a decree, a certificate of appropriation, a diligence claim to the use of surface or underground water, or a water user’s claim filed in general determination proceedings, shall be transferred by deed in substantially the same manner as is real estate. (b) The deed must be recorded in the office of the recorder of the county where the point of diversion of the water is located and in the county where the water is used.

(3) (a) To update water right ownership on the records of the state engineer, a water right owner shall submit a report of water right conveyance to the state engineer. (b) The report of water right conveyance shall be on forms provided by the state engineer. (c) The report shall be prepared by: (i) or prepared under the direction of and certified by, any of the following persons licensed in Utah: (A) an attorney; (B) a professional engineer; (C) a title insurance producer; or (D) a professional land surveyor.

Separating the Water Right From the Land

As noted, water rights run-with-the-land unless, however, there is a process in which you can separate the water rights from the land. In order to do this, it must be explicitly stated in a deed. 

With the county recorder for a perfected water right. For instance, say I put a little house there just to show that when you say the water department you mean that if you sell your land typically the water transfers with it the water right water right will typically transfer with the land unless you explicitly reserved it in a deed when you convey the property pretty easy way to tell if you have a water a person water share if you have a water share you typically paid assessment yellow water right it’s you just own it and even though it’s considered real property.

WHAT ARE THE WATER ASSESSMENTS?

Water rights are owned by the water user and so they don’t need to pay for any assessments. 

CAN A PERSON LOSE THEIR WATER RIGHTS?

BUYING WATER RIGHTS AS AN INVESTMENT

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WHAT IS A WATER SHARE?

Water Shares are a different type of water ownership, which is not direct ownership of a water right from the state but involves water that has been appropriated by the state to a corporation, not an individual.

When an entity, such as a city/town, ditch company, irrigation company, canal company etc., is given water rights by the state, that entity will typically have a president, water board, and other leadership positions to manage the entity.

A specific number of acre-feet of water is assigned to each share and the shares of water are held by individual shareholders who typically pay a monthly or yearly assessment.

The entity takes care of specific physical parts of the water distribution system, management of the system, hires a watermaster, specifies the responsibility of the shareholders, and directs the distribution (use) of the water. The ‘use’ of the water is typically referred to as water turns and will specify the amount of water a shareholder may use and for what duration. This control should help in times of drought to keep water usage as fair as possible.

What to verify when buying a property with water shares:

  • What company or entity are the shares part of.
  • How many acre-feet of water are included per share.
  • Verify with the entity that the seller owns the number of water shares claimed and if there is an outstanding assessment due.
  • What is the geographic location of the entity
  • May water shares be transferred for subsurface diversion (a well)
  • The market value of the water shares.

WHAT ARE WATER SHARES?

A company owns the water rights and they sell shares, basically you can think of it as they they rent out that water their shareholders you can assessment for the ability to use that company’s water rides and then if you if you own a share in a company you can file a change application to move it outside of what the Company’s base rights are for 4 and that’s the the process we just described set this point IDs these questions for for what they’re worth as your starting position if you were at that point are there 

In Utah, water shares are owned by companies.

Water Shares and Land Transfers

I sell my property that water share is not attached there background so it doesn’t transfer by pertinence if I wanted to sell my property and conclude that water share in that sale I can sell that share to the new owner they would go to the company to company would re-issue a share of stock in their name that’s how ownership in a company keeps records of that ownership shares so like I said a water right assessment to use that water will be home.

Water shares a company owns the water rights and then they sell shares basically you can think of it as they rent out that water to their shareholders you can assessments for the ability to use that company’s water rides and then if you if you own a share in a company, you can file a change application to move it outside of what the Company’s base rights are approved for.

If you need help from an experienced shared well 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.

Author: Clint Dunaway

Arizona attorney.