Should I Buy Additional Water Rights For My Residential Lot?

[COEngineer]

senior is sort of misleading there

misleading because any well is going to be junior as all wells postdate any true senior rights that were appropriated before the irrigation well was even invented. you can typically think of a true senior right as pre 1890, or 1900 if you wanna be generous. and further misleading because denver basin groundwater is in it's own bubble outside of the priority system.

you'll probably see some stuff in that decree about the decreed annual use limits, which are function of the volume of the water under the area of the owned land used to decree the right and a 100 year aquifer depletion factor (i.e. the annual use of the well shall not be a rate that would deplete the volume in less than 100 years) for the nontrib stuff and likely see the rule that not more than 98% of the water is to be consumed for the not nontrib stuff

so it's a good water right. can be used for anything, successively to extinction, and on lands not belonging to the well itself. but seniority has nothing to do with it's goodness so to speak. it gets to operate regardless of it's seniority, so even better. there's likely even a paragraph in that decree that talks about the water not being adminsitered in accordance with the priority system.

overall a great water right that will be valuable until the denver basin runs dry, which will probably be long after you've sold the house and died of extreme old age

still whether or not it's worth it, or will increase the value of your property enough to make it worth it, i really have no idea for sure. but my gut tells me that value of that water will certainly increase

It actually goes for 300 years (includes a table with depletion numbers for each year).

My problem is that I think it could be worth $7500 to someone, but not me and probably not to the next buyer of the property when I sell in 10-20 years.

I asked my realtor's opinion and she said that unless a buyer was looking to put in a huge garden or an outdoor pool, they probably wouldn't have any use for that much water, and I may not get a return on my investment.

As I understand it, I could never sell this water right to anyone without selling the property, so it's not a liquid asset.

 

[squirrel]

I bet you could sell it to anyone who is on the same pipe. That is why it will convey with a bargain and sale deed and be recorded separately from your dwelling. (But HOA rules will prevail)

To do nothing you should do just that, do nothing.

Before you buy in you need a water attorney visit. Most truthful statement I ever heard was "if you think you understand CO water law you haven't read enough".

If that statement were not true then why would teams of lawyers fight over what is "law". This eternal fight is over water but ever notice whoever has the most money (lawyers)ends up with the water?

I can find no fault with anything togie has said that I know anything about ... so stands to reason that what he says, that I know zero about, is likely true too, but free internet advice is just that!

 

[TOGIE]

It actually goes for 300 years (includes a table with depletion numbers for each year).

My problem is that I think it could be worth $7500 to someone, but not me and probably not to the next buyer of the property when I sell in 10-20 years.

I asked my realtor's opinion and she said that unless a buyer was looking to put in a huge garden or an outdoor pool, they probably wouldn't have any use for that much water, and I may not get a return on my investment.

As I understand it, I could never sell this water right to anyone without selling the property, so it's not a liquid asset.

I think your real estate agent makes a good point. people don't wanna pay extra for something that is just that, extra and not needed.

squirrel makes a good point, perhaps it could be sold individually within the HOA, though i'm betting the contracts between you and the HOA might prohibit that, the decree itself nor would state statute prohibit that though.

Before you buy in you need a water attorney visit. Most truthful statement I ever heard was "if you think you understand CO water law you haven't read enough".

If that statement were not true then why would teams of lawyers fight over what is "law". This eternal fight is over water but ever notice whoever has the most money (lawyers)ends up with the water?

I can find no fault with anything togie has said that I know anything about ... so stands to reason that what he says, that I know zero about, is likely true too, but free internet advice is just that!

free internet advice is indeed free and mine should be treated as such. a water attorney being consulted is never a bad idea, i bet you could get advice on something like this for just an hours time. but denver basin groundwater decrees are about as straightforward as decrees come in colorado, i wouldn't pay much for advice on this and if i did it would be from real estate agents and natural resource economists.

teams of lawyers fight over this stuff and make so much money because we're in a semi arid state with some of the most over-appropriated river basins in the west with some of the highest population gains west of the mississippi. add to that water is a public resource that is also treated as a private property right for it's use and you have a highly highly regulated market system surrounding a public resource.

an extraordinarily complex system of laws governing water - which are all designed to both block things like wall street investment in water and protect vested water rights from injury - which in and of itself has to be measured quantified and modeled with a relatively large degree of uncertainty means there's a lot to argue about in an effort to be sure the law is followed.

it's quite a spectacle, and extremely interesting, to sit in the chief district court judges courtroom (interestingly, there are no dedicated "water" judges, they are just normal district court judges who also specialize in water law, in my basin that happens to be the chief district court judge) and watch 12 different lawyers duking it out and beating engineers over the head on the stand over consumptive use analyses.

i know quite a bit more than the average citizen about colorado water rights, because it's part of my profession, but in reality i still know nothing.

 

[squirrel]

No real estate agent should touch this with a 10' pole with the possible exception of whether it will increase re-sale value. Even then the smart answer would be "well it's possible, but there are a lot of variables here"... "you should really consult a qualified attorney".

 

[Dugie]

for sure if $ isn't an issue

 

[Jason73]

Like the old timers say...Whiskeys for drinkin, waters for fightin!

 

[LuketheDog]

As I understand it, I could never sell this water right to anyone without selling the property, so it's not a liquid asset.

Well, technically it IS a liquid asset...

 

[COEngineer]

Well, technically it IS a liquid asset...

Good one.

Better way to phrase it is that it is not a commodity.