Definition
Water rights are permission to use water from streams, wells, or other sources. They're critical in western states where water is scarce. Water rights separate from land rights, and rights allocation is complex. Wrong assumptions about water availability can kill projects.
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Water rights vary by state law and water source. Riparian rights attach to land bordering water; prior appropriation rights are based on beneficial use. Water rights significantly affect property value in arid regions.
Pro Tip
If your project depends on water, verify water rights exist and are adequate. In arid regions, water rights are sometimes more valuable than the land itself.
Example
Water rights to 2 acre-feet annually from a irrigation district for agricultural use.