Utah Water Rights and Shares

Water is Gold
Water is one of the most valuable commodities in our mountain desert. Therefore, the ownership and use of water can become hot debates.

It is also a very complex issue and usually requires the consultation of an attorney who specializes in water usage and ownership. This article is merely a simple overview.

Land with Water vs. Land without Water
In most cases, land developers are required by the local municipality to submit water rights or shares worth a certain amount of water per acre or per building lot in order to develop the land. This makes the availability of water of utmost concern to a developer who is thinking about purchasing land.

There are situations where water rights were sold years ago to a developer or other land owner and now the family wants to sell the land. Without water, the land does not have the value it would otherwise have to a potential buyer. As a real estate broker, it is difficult to explain to land owners why their land isn't worth as much as the land down the street because they have attached water and they do not.

A Water Right vs. A Water Share
A water right is the right to use water under certain guidelines. It is treated as real property and title is transferred by deed just like the land. Water rights attached to land can be transferred "silently" if the parties do not otherwise object.

A water share is like a stock share in a company, only in this case, it is a share in a water company. It is treated as personal property and the shares are sold under a bill of sale. They do not necessarily pass with the sale of the land and must be written into the transaction. Read the contract!

Water Rights
All water in Utah is governed by the State Water Engineer. Owners of water rights must "perfect" their rights by actually proving they use the water on a routine basis. "Use it or lose it!" The rights also must be recorded with the State Water Engineer.

There have been unfortunate cases where great-grandpa told his son they had water rights and he told his son, and he told his son, etc, etc. However, when the developer went to pay for the rights, there were no rights.