Legal Due Diligence

Columbia Basin Water Transactions Program

Quarterly QLE Meeting

April 2004

Water Right   

: a right to the use of water (as for irrigation) … originally acquired by appropriation and perfected by beneficial use … and … if acquired by appropriation resting … in the individual to whose land it is delivered ...

Webster's Unabridged Dictionary

Water Right   

: a right to the use of water (as for irrigation) … originally acquired by appropriation and perfected by beneficial use … and … if acquired by appropriation resting … in the individual to whose land it is delivered ...

Webster's Unabridged Dictionary

Legal Due Diligence

• … acquired by appropriation… Validity: Is it a valid water right?

• …perfected by beneficial use…Extent: Has the water been continuously used and not relinquished?

• …to whose land it is delivered… Appurtenancy: Who owns the water right?

Validity: Is it a valid water right?

• Was is a valid appropriation based on the law at the time of first use? – Pre Code Water Rights

• Notice Rights• Beneficial Use Rights• Riparian Water Rights

– State Issued Water Rights

Validity: Is it a valid water right?

• Research State Records: Water right files at State Headquarters

Water right files at regional offices

Public Disclosure Request,

ask for complete fileIf subject to an adjudication,

agency investigation, possible objections, exceptions, interim orders.

Validity: Is it a valid water right?

• Understand differences in documentation--Are filings and certificates proper for the type of water right?

Certificates: indicia of relinquishment or abandonment?

Permits: development schedule current?

Claims or pre-adjudicated water rights: facial validity; copies of documentation—decrees, notices, etc.--in support of claim.

Extent: Has it been continuously used and not relinquished?

• Field Investigation

• Documents: previous court filings, reports relating to land use practices

• Affidavits from Previous Landowners: when possible, document previous water use now.

Extent: Has it been continuously used and not relinquished?

• Relinquishment Standard in your StateWashington: 5-years, nonuse without sufficient cause

Oregon: 5 years in 15, ready willing and able

Idaho:

Montana: 10-years, nonuse when available

Appurtenancy: Who owns the water right?

• Assumed to convey with real property.

• Obtain title commitment on real property upon which rights historically used from Title Co. to confirm present ownership.

Appurtenancy: Who owns the water right?

• Construct chain of title for water right. – To back to priority date, sometimes back to

patent. – Review property deeds for grantor reservation

of water rights.– Review property deeds for exceptions for

restrictions. – Grantor / Grantee indexes.

Appurtenancy: Who owns the water right?

• Are there other water rights to the property?

• Examine the records confirming taxes or assessments paid to a mutual water company, an irrigation district, or some other kind of water district.