Posted: Tuesday, October 24, 2023
Author: Vinny Delgado, Partner, Ranch Sales | Licensed in MT
Vinny,
I'm a city person looking into investing in some rural land. This kind of investment
is new to me, and I know there's a lot to consider. I know water rights are a
big thing to consider, but I'm not sure why. Can you explain to me what the big
deal is with water rights and what I should be mindful of when assessing land
to purchase?
Dear City Person,
Understanding the difference between the three types of
water rights typically conveyed with a ranch sale is key. Domestic well water
is registered with the Department of Natural Resources and Conservation (DNRC)
when a well is drilled, and this water is used for domestic use like homes,
lawns, etc. There are typically not any restrictions on drilling additional
wells for the same benefits on a ranch. Stock water is used for animal
consumption; this can be via springs, surface water, or developed tanks and is
also registered with the DNRC. Irrigation water is where things can sometimes
get dicey. Understanding priority dates, the number of acres that can be
irrigated, and the period within a year that water can be used is critical. A
knowledgeable ranch broker understands how to read these documents and will
know a trusted water specialist who can review and consult the pros and cons of
the water rights associated with a ranch you are interested in so you can make
an educated decision.
