Buying an acreage: Water rights

Listen to this radio show (MP3 download) or read below.

Radio interview source: Michael Landreth, president, Realtor's Land Institute

We've had so much rain at our place, I don't worry about water, but folks out West don't always have that luxury, and things get a little testy if water sources aren't managed properly. You have to know what water is considered yours and what isn't.

Michael Landreth is president of the Realtor's Land Institute, and says to understand your water rights, decide what your primary use of the water will be.

"You're going to determine what the well regulations are, and you're going to determine what the water rights are to water that passes over and across your land," Landreth says. "Can you capture it, or can you not? Some uses relate only to irrigating pastures, hay crops or row crops; and some relate to livestock being able to drink from it as it goes pas,t but it can't be applied to any other beneficial uses."

There are two general types of water rights: direct flow and storage. A direct flow right is measured by the rate of flow, not a total volume of water. A storage water right is measured in terms of volume in a storage vessel, such as in a reservoir, to be used at a later time.

Water rights vary from state to state. In some states like Colorado, the water is over-allocated, so if you're new to the area you might be out of luck due to a statute that says "the first in time is the first in right," meaning whoever got there first gets to use it.