Colorado’s water courts are the legal forum for adjudicating new water rights, changing existing water rights to new uses, approving augmentation plans for junior water rights, and determinations that conditional water rights are being diligently pursued to completion. The water court system has existed since its creation by statute in 1969, and is unique to Colorado.

I have a breadth of experience in all the foregoing types of proceedings on behalf of both applicants and opposers, and am fundamentally committed to making water court a less complicated, more affordable and more transparent process for my clients.

Colorado’s constitution declares all waters of the state to be a public resource, subject to the private right of appropriation. As such, water rights are usufructuary in nature—meaning a decree confers the right use water, rather than owning the resource itself.

Nonetheless, decreed water rights constitute real property and function as such under Colorado law. They are transacted through deeds, and can also for example be pledged as debt collateral to third parties, much the same as a parcel of land or stock shares.

♦‍ Diligence reviews. No title insurance policies cover items related to water. So during the pre-purchase diligence period for any conveyance, it is incumbent on the purchaser to investigate and determine any issues associated with the specific water right(s) being purchased, or with the water rights/features appurtenant to the parcel of land being purchased. These potential issues are numerous and bear heavily on the real world value of a water right. Some notable examples include things like ambiguous title history or liens on the seller’s part; potential the water right has been abandoned for non-use despite still existing on paper; physical supply limitations; inconsistency between the right’s decreed use and the purchaser’s contemplated use; and the existence of water features such as ponds requiring a decreed water right but lacking a valid one.

‍♦ ‍Conveyances – The only form of insurance existing for purchasers is the type of deed through which a water right is conveyed—quitclaim, special warranty, and bargain & sale deeds are the most common. The type of deed utilized reflects the degree to which the seller agrees to warrant against any title defects or others issues that might arise in the future.

Because Colorado water rights are bought and sold much the same as any other real property, the validity of a water right under Colorado’s water adjudication and administration laws is a matter entirely separate from the issue of who legally owns the property right. For example a seller could market a perfectly valid water right, but fail to mention—or not even be aware themselves—that they in fact only legally own half the water right they’re purporting to convey, or none at all.

Water rights as a category of real property are particularly vulnerable to title chain issues, for a couple reasons:

♦ In Colorado water rights are entirely separate/severable from land. Moreover, a water right can be infinitely fractionalized and sold off to however many willing purchasers might exist—each of whom is subsequently free to sell again, in whole or in part, or to lease, mortgage or otherwise market off specific interests in that title to others.

Title chains can become very complex and it is not always possible to comprehensively ascertain from start to finish—and the longer the title history, the greater the likelihood there will be missing links and some inherent unclarity in the chain.

♦ Water right title histories can also often be plagued with deeds along the chain containing vague or ambiguous language, and use of different terminology to describe the same thing evolving over time. Furthermore, any doubts when it comes to what may or may not have been conveyed in a particular deed are resolved in the seller’s favor (i.e. presumed not to have been sold). Therefore, any unclear or otherwise confusing/inconsistent conveyances along the chain represent a potential severed link and vulnerability for the current owner/purchaser.

Title chain investigations can become very difficult and time consuming, and scope of work must be carefully assessed on a case by case basis, as the appropriate level of depth/resources committed depends on the specific context of the client’s issue and what purpose the investigation will ultimately serve.

Mutual ditch companies. Mutual ditch companies are corporations formed pursuant to statute and governed according to their bylaws. Such entities manage and hold beneficial title to water rights on behalf of their stockholders, i.e. those holding shares in the ditch corresponding to a pro-rata entitlement to the water held by the company.   

Ditch easements. Ditches often span many miles between the diversion point and the place where the water is actually delivered, and frequently cross private property of all sorts. By law, ditch owners possess an easement in the ditch allowing them to enter private property for purposes of cleaning, maintaining and operating the ditch, and which, absent agreement from the ditch owner, prohibit those across whose land the ditch runs from re-routing, altering or otherwise interfering with any portion.

Drilling and operating a well requires a well permit from the State Engineer’s Office. Depending on where you are located, the size of your parcel and the pumping rate/uses contemplated, this permit may be all that is required.

However, most stream systems are already over-appropriated, and in these locations, with limited exception, the state will not issue a well permit unless the applicant first secures a source of augmentation water to offset depletions. Some geographic areas are covered by “umbrella” augmentation plans run by large regional districts, and individual users may secure a supply contract from such entities as their augmentation source. Where no such coverage exists, the prospective well user would have to adjudicate their own private augmentation plan in water court.

While a user may obtain a decreed water right for the well itself, it is not required to drill and operate one—only an SEO well permit. Note however that having a well permit doesn’t confer standing to assert injury against others—only if the well is decreed can its owner do so.