Nevada and Water Rights
They say that in the 21st century water will be as valuable as gold in the American West. Since that will undoubtedly be true you are going to need to know as much about water rights as mineral rights. T. Boone Pickens, legendary oil man, isn’t waiting for that eventuality. He made billions of dollars int he 20th century investing in oil and gas and he began the 21st century buying up water rights in Texas.
Nevada passed its first water law way back in 1866 and has made several amendments since. However, two things remain constant. One, all the water in the Silver State, whether underground or on the surface belongs to the public. Second, the use of that water is allocated on two tenets: prior appropriation and beneficial use.
Prior appropriation is known more familiarly as “first in time, first in right” and recognizes the rights of legacy water users in times of shortage as new uses for water are granted. The checklist for beneficial uses includes the usual suspects of irrigation, recreation, stock watering, mining, commercial and municipal uses.
The pithy catchphrase for those claiming beneficial use of Nevada water is “use it or lose it.” Land owners can not speculate in water rights or hold on to rights without intending to use them. Water rights can, however, be transferred before they are lost forever and that has resulted in a lively market for selling water rights in the state. When such a transaction takes place if a Report of Conveyance is not filed the state has no way of knowing there has been a change of ownership and any dispute can end up in court.
Since 1903 all applications for water rights in Nevada must go through the State Engineer. Permits are required with exceptions for uses that pre-date law requirements (most of the state’s natural surface water) and domestic water wells. Water from wells drilled on private land can be used for cooking and cleaning, gardens and lawns and family pets. The limit is two acre feet per year or a little more than 650,000 gallons.
When buying land in Nevada water rights are conveyed as an attachment to real property unless there is a provision in the sale to specifically exclude the deed of conveyance. Once in control of those rights it is possible to change the water’s point of diversion, the manner of its use and the place of its use by filing an application with the State Engineer.
So when shopping for land in Nevada it is critical to know your rights – water rights. Before you get too far in your negotiations consult a water rights expert to make sure you will have the liquid gold you need in the “Pending Water Apocalypse.”