In real estate negotiations, water rights are a complex and frequently disputed topic. These rights authorize someone to legally use water from a particular source, like a well, lake, or river. These rights can be transferable and always associated with the property for sale.
Water rights can be categorized as riparian, prescriptive, appropriative, or hybrid, depending on the location and laws of local authorities. A real estate’s prospects for growth, use, and monetary value are also based on its water rights.
Therefore, it is necessary to go through a complete analysis and carry out proper due diligence before acquiring property for sale with water rights or terminating real estate that lacks them.
Water Rights: Meaning and Background
Water rights legally entitle a person to use water from sources like groundwater, lakes, or rivers. These rights also enable someone to use water for domestic purposes, agriculture watering, and business use in addition to preservation and environment protection.
Legal and Historical Background
The legal and historical background of different water rights differ due to culture, region, and legal system. Common forms of water rights include;
- Public Trust Doctrine: Acknowledges the water rights by considering the interest of the public in water resources.
- Riparian Rights: These rights are based on land ownership along a waterway.
- Prior Appropriation Rights: These are historically used rights that are based on the first-in-time principle.
Major Types of Water Rights
Water rights differ as to certain rules and regulations based on the use, location, and volume of water. Here, we will explore the types of water rights together with their comparison and property for sale with water rights.
Riparian Rights
A most common water right based on ownership of land bordering a natural water source like a lake or river is known as riparian rights. Through these rights, the owner can use appropriate amounts of water for residential purposes such as washing, drinking, and gardening. Moreover, Riparian rights are often shared among all landowners adjacent to a particular watercourse and cannot be sold separately from land.
Littoral Rights
The second common type of water rights is littoral rights, which are somehow similar to riparian rights but apply to properties along with large water bodies of lakes or oceans.
These rights allow the owner to use lake or ocean water for domestic needs in addition to visiting the coast to enjoy pristine natural landscapes. Littoral rights are also not sold or transferred without land and are usually shared among all owners of the same shoreline.
Difference Between Riparian and Littoral Water Rights?
To debate and answer the question, Are water rights real property? We need to differentiate between riparian and littoral water rights. The volume and source of water distinguish these water rights.
The basis of Riparian rights is running water, usually in streams and rivers, while Littoral water rights are based on still water, such as oceans and lakes. Another important difference is that in Riparian water rights, the availability and quantity of water changes according to weather or season, but in Littoral rights, the supply of water remains constant and abundant.
The state regulates Riparian rights to enable equitable use of water by all owners, while Littoral rights are regulated to safeguard interests in commerce, navigation, and natural security.
Water Diversion
Another important aspect regarding property for sale with water rights is the consideration of water diversion. It is the process of moving water from one supply to another source for power generation, drinking, or irrigation. This diversion can be performed by man-made or natural structures such as canals, pipelines, or dams.
However, diversion may have some advantages or disadvantages for the inhabitants and ecosystems. A few advantages are better flood control, better agriculture usage, and enhanced supply of water. At the same time, the disadvantages are habitat loss and reduction in water supply due to the changing flow of the river.
Mechanism of Property for Sale with Water Rights
A Water right is an integral component of property transactions that can be obtained with the help of riparian rights, littoral or appropriation rights. The exercise of these rights as to protection, usage, or transfer of water mainly depends on various laws and regulations of a particular area.
Arguments for water rights as real property
Proponents of treating water rights as real property argue that it gives security and predictability for water consumers along with incentives for sustainable and economical water use. They further add that treating water rights as real property can boost investment in water infrastructure and promote the saving of scarce resources.
Arguments against water rights as real property
Some opponents of treating water rights as real property argue that this strategy affects the community and allegedly compromises the welfare of the general public. They also contended that this could lead to social inequity, environmental deterioration, and privatization of water.
Conclusion
Water rights are essential components of real estate transactions, which are categorized into different types based on the location, source, and use of water. These rights are not like traditional real estate rights, yet they include some characteristics that make them quasi-property rights.
Every kind of water right holds unique benefits and drawbacks as well as potential legal considerations. Therefore, to fully grasp the nature, scope, and legal implications of water rights attached to a property, the potential buyers and sellers should perform extensive due diligence while exchanging property for sale with water rights.
