About Water Rights
What you need to know about water rights, before buying property in New Mexico
For years you’ve been dreaming of the day when you can escape the city and move to a quieter place. You can already imagine watching the sunset over the beautiful Mimbres Valley from your pueblo-style home or sitting around a campfire gazing up at the star-filled New Mexico night sky and now that day is getting close. You’ve been doing your homework, searching for real estate agents and browsing land to buy. Maybe you’ve already found the perfect piece of property to start the next chapter of your life on. But does that land come with water rights?
At La Paloma Real Estate we get a lot of questions regarding water rights. It’s not an easy topic to navigate and it can be a little dry (pun definitely intended). If you’re moving from a city or suburb of New Mexico you’re probably aware of water rights but not well informed. If you’re moving from out of state this might be the first time you’ve ever heard of water rights.
In semiarid New Mexico water is considered the most precious and scarce resource. Looking at the lush grass-filled valleys surrounding the Mimbres River it is hard to believe that the state’s average annual rainfall is only 13.9 inches or that 75% of the groundwater is saline and not fit for domestic use. This doesn’t mean your dream home can’t be a reality, just that as a prospective landowner in New Mexico there are certain unique precautions you need to take.
What is prior appropriation?
In rural New Mexico, access to surface and groundwater is administered under a system of prior appropriation, which is overseen by the Office of the State Engineer or OSE. Prior appropriation, in simpler terms, is first come, first serve. The first person to appropriate or divert water for a beneficial use has rights to it. As long as the water is being put to a beneficial use, a water right is indefinite. A water right dates back to when the application is filed or the date the water is first used.
There are water rights in New Mexico dating back to the 1800’s and older. Under the prior appropriation system, a senior water right holder can access their allotment of water before a junior holder.
Prior appropriation often only comes into play when two large operations are drawing from the same water source during a time of drought. As an example, imagine two large ranches using the same river to water their livestock. During a time of drought when there isn’t enough water for both ranchers, the ranch with the earlier, or more senior, appropriation date has a right to draw all their water before the ranch with the junior date takes any.
Does the land you’re buying have an existing water right or will you need a new one?
When buying land in New Mexico, it is important to determine if the land is being sold with an existing water right. Water rights can be sold with property or separately and depending on where the land is located, water rights can be very valuable. In most cases, the water rights will be included in the sale of the property they are tied to, but make a point of checking with your realtor to make sure.
An existing water right is included in the sale
If the property you are interested in does have an existing water right that will be included in the sale, that’s great! But the work is not done yet. A buyer should require that the water right is conveyed in the deed for the land and that at the time of the sale all water right documentation be transferred.
Under New Mexico state law the buyer must officially change the ownership of a water right. This can be done at the Office of the State Engineer.
When buying a property with existing rights you should also determine if those water rights have already been adjudicated or if the process of adjudication is ongoing.
“Adjudications determine who owns what water rights and in what amount. They are required by statute. The purpose of adjudication is to obtain a judicial determination and definition of water rights within each stream system or underground basin,”
Currently, 20% of the state’s water has been adjudicated over, while 50% is currently going through adjudication. Adjudication is a long process so don’t let it stop you from buying property, but it is something you should be aware of.
Your water right is for surface water
13% of New Mexico’s water rights are for surface water. Many of these are associated with an acequia or irrigation ditch. New Mexico and Colorado are the only states with functioning acequias, some of which are hundreds of years old. They are not only important for water delivery but there is also a cultural and historical aspect to them.
The environment surrounding an acequia is vibrant and thriving but they come with certain responsibilities. If you become the owner of surface water rights you will also be responsible for the care and cleaning of the waterway. These water systems fall under the protection of associations and it is a good idea to become informed on the bylaws of the association your particular acequia is a part of.
Make sure the annual fees associated with the water rights are up-to-date and paid as you will inherit any outstanding dues associated with the water right.
Your water right is for groundwater
87% of New Mexicans rely on groundwater and it is likely you will as well. Groundwater is often more accessible than surface water and less likely to be contaminated. If your water right is for groundwater you should do some investigating.
- Ask neighbors how deep their wells are and what the water quality is like
- Ask local well drillers and real estate agents what they can tell you about water in the area
- Contact the OSE and U.S. Geological Surveyors to find out what basin you will be drawing water from and information on that basin
If it’s possible, have a water sample tested by a state-approved laboratory. The New Mexico Environment Department offers free testing of groundwater from private wells.
Ok, still with me? See what I mean about this topic being a little dry at times? For landowners in New Mexico water rights can seem like a big issue with a lot of small details, but as long as you have an understanding of the subject and how it pertains to your situation you’ll be able to protect your investment.
So we’ve covered buying property that includes a water right. Take a breath, we’re halfway there! Now, what about buying property when the sale doesn’t include a water right?
A water right is not being included in the sale of the land
Although most land being sold in New Mexico comes with water rights it is not uncommon for land to be sold without water rights. There may not be any water rights associated with the land or there may be old water rights the current owner is not aware of. Some water rights in New Mexico date back hundreds of years and have changed hands dozens of times so it’s not unheard of for a landowner to be unaware of the water rights tied to the property.
Visit the State Engineers website or call the office
Your first step should be to visit New Mexico Office of State Engineer’s website. The OSE oversees water use and distribution in New Mexico. This website is where you can find application forms for everything from acquiring new water rights and transferring water right ownership to drilling a new well.
This is also a good place to find information on current and old water rights. A search for old water rights will be easier if you can provide the names of streams or basins on the property or a name of the current owner and previous owners. If you are able to provide this information the OSE has a handy tool that allows you to search the records online.
Next, visit the property and look for any signs of a previous water system being in place. Look for things like wells, irrigation ditches or old fields. If equipment is present, is it operational? If water rights are not put to beneficial use for more than four years the owner is notified that his or her rights will be forfeited. One year after notice the water right is considered abandoned.
If old water rights are present and in good standing on a piece of land then you need only apply for a change in ownership with the OSE. If there are no water rights associated with the property an application for new water rights will need to be filed.
Applying for a new water right
There are two categories of water rights, domestic and everything else. Domestic includes household use, non-commercial irrigation, and non-commercial livestock watering. These applications permit the use of up to 3 acre-feet annually. A single acre-foot is equivalent to 325,851 gallons. The other category covers commercial, agricultural, industrial and municipal uses and the application process is more complex.
Once the application is filed the State Engineer goes to work. They will ensure that:
- water is available
- that the new appropriation will not impair already existing rights,
- the intended water use is in accordance with state’s water conservation efforts
- that the intended use is not detrimental to the public welfare
The applicant must also publish a notice of their application in a local newspaper so that members of the public have an opportunity to object.
You now know about prior appropriation and how water rights work. You know what to ask for if you’re buying land that includes water rights and you know what to do if you’re interested in land that doesn’t appear to have water rights.