What's the Big Deal with Water Rights? - Ask Vinny

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.

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