How Do Water Rights Relate to Real Estate Transactions?
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Water Rights
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Water rights are highly desired in real estate transactions. Whether for agricultural use, recreational use or other purposes, water rights can significantly increase the appeal of a real estate property. Many states regulate water rights according to the availability of water in the area. According to Galaty, Allaway and Kyle in Modern Real Estate Practice, areas of the country with plentiful supplies regulate water rights based on common law doctrines of riparian and littoral rights, and areas located in arid regions control water rights according to the doctrine of prior appropriation. To ensure that a real estate transaction accrues to the purchaser the desired water rights of a property, prospective buyers need to understand the methods of determining water rights and how they relate to real estate transactions.
Riparian Water Rights
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Riparian water rights govern water rights on land adjacent to streams, rivers and similar bodies of water. As with many laws, riparian water rights vary from state to state, but typical water rights under riparian common law provide property owners with unlimited rights to the use of the water as long as the flow of the water is not impeded or altered, and the owner does not contaminate the water. On navigable streams and rivers the property line ends at the water's edge and the state declares the waterway as a public highway with the state retaining the rights to the land under the water. Where nonnavigable bodies of water are concerned, the property line extends to the middle of the body of water and the rights to this property are retained by the land owner.
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Littoral Water Rights
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Littoral water rights govern an owner's rights to water on land bordering navigable lakes, oceans and seas according to Modern Real Estate Practice. Littoral water rights are similar to riparian water rights in allowing owners unrestricted access to the body of water; however, the determination of the property line relies on the high-water mark. Any land below the high-water mark is state property with all land above the high water mark retained by the land owner. According to Modern Real Estate Practice, riparian and littoral water rights attach to the land, and ownership accompanies any change in land owners. Ownership rights to land created or lost as a result of decreasing water levels or erosion also factor into the water rights of the land owner. As water recedes the owner retains the rights to all newly created dry land; however, erosion decreases the land the property owner controls.
Doctrine of Prior Appropriation
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The doctrine of prior appropriation limits water rights to limited domestic use with the state retaining all rights to the water. Land owners in states that implement water rights according to prior appropriation must prove that they have a beneficial use for water to obtain rights to use a limited amount of water and the water rights attach to the land of the permit holder. The permit holder, according to Modern Real Estate Practice, may sell the rights to the water to another individual; however, water rights granted in prior appropriation states limit the ownership to the water and not the water source. If it is necessary to cross another individual's property to access the water source, the property owner for that land must grant access to their property to reach the water source.
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