Water Title Examination
| Publication year | 1980 |
| Pages | 2043 |
1980, October, Pg. 2043. Water Title Examination
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Population increases in our semi-arid state have inevitably and will inexorably increase demands upon a finite water supply. Clients will increasingly request assistance of counsel in assuring the validity and sufficiency of the water rights held essential to their well-being and prosperity. Sufficiency of supply entails disciplines other than the law; but the lawyer can give valuable aid in the determination of the validity of title to the right.
"Title" in the sense used refers to the acts, instruments or records by which a water right has been acquired or by which it can be proven.(fn1)
This article explores the means by which a lawyer can come to an informed opinion as to the "title." Of course, even though title to the water right is clear and indefeasible, counsel must avoid implying to a client that such fact also establishes either the sufficiency of the supply for continued similar uses or its availability for contemplated changed uses. The amount of water yearly available for use depends upon God's benevolence and upon the needs of senior water users.
We are concerned with the title to a water right. "Water right" means the right to use water; or, more accurately:
A water right, acquired under the Arid Region Doctrine of Appropriation, may be defined as the exclusive, independent property right to the use of water appropriated according to law from any natural stream, based upon possession and the right continued only so long as the water is actually applied to some beneficial use or purpose; . . .(fn2)
A water right is real property,(fn3) an incorporeal hereditament.(fn4) Water is part of the "negative community"; and, while capable of being used, it is not susceptible to absolute ownership.(fn5) In Colorado, the title to the water of the natural streams is in the people of the state of Colorado.(fn6) No individual can hold such title. Thus, a water right is a usufructuary right only.(fn7)
Although title to the water is held by the people of the state of Colorado, the Colorado Constitution provides that the right to divert the unappropriated waters of any natural stream to beneficial uses shall never by denied.(fn8)
A water right, then, is acquired by appropriation. An appropriation is generally defined as the taking of water from the natural streams and the application of that water to a beneficial use. When this act is
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done, the appropriation is completed.(fn9) Under the Appropriation Doctrine and the Colorado Constitution, one who first takes water from the stream for beneficial uses has a preferential right, as against subsequent users, to continue the taking.(fn10) The right of use, coupled with this preference, constitutes one's water right.(fn11)
If a water right is considered to be a real property interesf, it should follow that a title examination of the right should be similar to the ordinary real estate examination. In many respects it is; but there is a wide variety of interests in water rights, some of which bear contractual or personal property aspects. The water title examiner must be aware of these varieties and examination techniques must vary with them.
In Colorado, most water rights involve one of the following: private ditch; private reservoir; mutual ditch or reservoir company; water conservancy district; irrigation district; public or common carrier ditch; or well. Specific methods of investigating the titles to waters from each of these sources is separately discussed.
As mentioned, one who takes water from a natural stream and applies it to beneficial use is an appropriator and these acts constitute an appropriation. If that is all the appropriator has done, there will be no documentary evidence upon which the lawyer can base a judgment as to the existence of a water right.
However, most rights are evidenced by a decree as a result of the appropriator having participated in a general adjudication of water rights in the water division under the 1943 Adjudication Act(fn12) or its predecessor acts or by a decree by the water judge of the appropriate water division as established by the 1969 Water Right Determination and Administration Act (the 1969 Act).(fn13) It should be emphasized that this decree is not a conferring of rights, which can be acquired only by the appropriation, but is a confirmation of the rights so acquired.(fn14)
Most appropriators have wisely participated in these adjudication proceedings and have obtained a decree to evidence their water rights. Participation in such adjudication proceedings is encouraged by the fact that failure to participate in them causes one's right to be subordinated in priority to those who do so participate.(fn15)
If the right is not evidenced by a decree, counsel should advise the client (the potential purchaser) that the seller probably has nothing to sell. The client can make his own appropriation and have it adjudicated with the same priority in administration (at least within a matter of months) as he could obtain by purchase.
The court's decree, then, is the starting point for counsel's examination. More often than not, a certified copy was recorded soon after it was obtained. Recording is not a prerequisite to its validity, but it is essential to its record marketability. If it was recorded, it will ordinarily be picked up, as at least an informational item, in the abstract covering the seller's lands. If it is not found there, or if the abstract entry is incomplete, the original can be located in the office of the appropriate district court.
Prior to the passage of the 1969 Act, Colorado was divided into water districts.(fn16) One of the district courts of the judicial district in which the water district was located had original jurisdiction for the adjudication of water rights for that district.(fn17) There fore, the decree can be found in that court.
All decrees entered subsequent to the effective date of the 1969 Act will be found in the water court(fn18) for the water division involved.(fn19) Moreover, all water decrees, whenever entered, are also kept in the office of the state engineer, indexed by claimant.
The decree describes the structure, its point of diversion, the amount of water decreed to the structure and the use to which
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the water will be put. If the right was adjudicated before the 1969 Act, the decree will also assign to the ditch a priority number for purposes of administration by the state engineer or his deputies.
Under the 1943 Adjudication Act, and its predecessor acts, it was necessary to preserve in writing all testimony as to the development and use of the water.(fn20) Thus, one can find not only the original statement of claim, but all testimony, usually in verbatim transcript, offered in support of claims made under the old acts. It is helpful to obtain this information so as to compare it with the present and prospective uses of the water. Additional information as to the location of the ditch from its headgate to the place of use can generally be obtained by examining the plat filed (under the name of the structure) in the office of the clerk and recorder of the county in which the headgate is located.(fn21)
If the water is now being used from the same source, in the same manner, in the same amount, in the same place and for the same purposes as was originally decreed, there is every reason to assume tentatively that the water right under examination is a valid and existing one susceptible to purchase by counsel's client. As to claims filed under the provisions of the 1969 Act, there is no requirement for a transcript of the testimony offered in support of the claim; but the application can be examined to obtain helpful information not repeated in the decree.
Counsel must then trace the chain of title to the seller. The job is complicated by the fact that most title insurance companies will not insure title to water rights; and most abstract companies will not certify their abstracts to include water rights. However, even without such certificate, an abstract of
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the documents affecting title to the seller's lands will ordinarily be most valuable in that it will at least show, as an informational if not a certified item, whether or not the water right was historically and in each instance conveyed as part of the real property. If the water right is specifically described, counsel's job is made easier.
Unfortunately, the water rights are often not specifically described. The deed may mention "appurtenant water rights" or "all water and water rights" or words to this effect; or the deed may say nothing at all. While a Colorado statute proves: "In the conveyance of water rights . . . the same formality shall be observed and complied with as in the conveyance of real estate,"(fn22) the Colorado Supreme Court has held in many cases that water rights may be conveyed even when not mentioned in the deed.(fn23) The rule is that the intent of the grantor will be determined and given effect.(fn24)
The difficulty, of course, from the standpoint of the title examiner, is that this intent is not disclosed by the record. Colorado cases can provide some guidelines. For example, if the land is useful only through irrigation, the presumption will be that water rights were conveyed.(fn25) This presumption will be particularly strong if the price paid for the land represents the price that would represent the price of irrigated land, as opposed to dry...
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