How The West Was Won: Water Rights

Western states are unique and deviate from the traditional English rules when it comes to water rights.  Most of the country adheres to riparian law, which allots water rights for reasonable use to a landowner located adjacent to a body of water.  Riparian rights run with the land situated next to the lake or river and generally cannot be sold separately from that land.

In the arid desert states, however, water is a sacred commodity that is generally awarded on a “first come, first serve” basis.  Known as “prior appropriation,” western water rights were generally awarded to those who, first in time, made the best and most beneficial use of the water.  Prior appropriation water rights are also usually subject to a use-it-or-lose-it principle – one cannot simply hold the water rights indefinitely without demonstrating the water is being put to some beneficial use. Water rights are “appurtenant” to land when they are “by right used with the land for its benefit.” Adaven Mgmt., Inc. v. Mountain Falls Acquisition Corp., 124 Nev. 770, 773 citing Black’s Law Dictionary 103 (6th ed. 1990).

In Nevada, water rights are considered real property, but they are not tied to the land and can be transferred separate from land. See NRS 533.040(1); Dermody v. City of Reno, 113 Nev. 207, 212, 931 P.2d 1354, 1358 (1997); Adaven Mgmt., Inc., 124 Nev. at 774 (water rights are a separate bundle of stick and could be pledged as security for a loan separate from the land to which it was appurtenant to).

Water rights must be specifically excluded from a land transfer; otherwise, they will be transferred with the land if not specifically reserved. Margrave v. Dermody Properties, Inc., 110 Nev. 824, 828 (1994).  Water rights are transferred by deed and the deed must be recorded in the recorder of each county where water is put to beneficial use and in each county where water is diverted from its natural source. NRS 533.382(3).  There are also requirements with the State Engineer’s office when water rights are transferred, so that the State Engineer can record the change of ownership of the water right. See NRS Chapter 533 et seq. For further information on water rights, including land development agreements, subdivisions, water right transfers, or State Engineer requirements, contact an attorney at Lemons, Grundy & Eisenberg.