Who Owns the Rain?
By : Reed Morris, ESQ
Ralph A Cantafio Law Offices
With our arid summers and growing population putting pressure on valuable water resources, citizens of Colorado do well to ask themselves, where does my water come from and who owns the rights to it? But for buyers and sellers of real estate, these questions are essential.
Water may be a highly valuable property right in a real estate transaction. Water rights may be bought and sold just as your home may be bought and sold, yet Colorado's system of water rights can be highly complex. Unlike zoning rules such as "residential" or "commercial" which are self-defined and easily accessible from local governments, the rights associated with water are typically not so easily understood.
For most real estate purchasers, water rights are not an issue. If you are purchasing a home or condominium within a water district or city, chances are the only consideration is whether the water comes from the tap with adequate pressure to lather up. However, purchasers of land with water rights will want to know (1) the fundamentals of Colorado's system of water rights, (2) the type of use allowed with their water right, and (3) the legality of the seller's current use of water. All too often the purchase contract is signed without proper consideration of the importance of water rights and the details needed to fully understand the transaction.
The fundamental principle in Colorado water law is generally described with the phrase "first in time, first in right." The historical context of western water law-and that which provides an easy example by illustration-stems from early mining laws enacted during western settlement. Modeled after the concept of staking a mining claim, Colorado law gives priority to the first person to divert water and put it to "beneficial use." Such person owns the water right subject to exceptions.
Two other fundamental principals are (1) maximizing the beneficial use of water (though the legal definitions of "maximizing" and "beneficial use" are constantly evolving), and (2) protection of senior water rights through the priority system. The location of the right, or the point on the stream or river from which the water is diverted, is an important concept as well.
Purchasers of water rights should also be aware of the decision-making structure used by the State of Colorado for protecting senior water rights and for establishing the water right. The Colorado State Engineer administers water rights and serves as the executive of the Colorado Division of Water Resources. There are seven water divisions located in each of Colorado's seven major river drainages served by their own Division Engineer, Water Court, and Water Judge. Our division is located in Steamboat Springs. The Water Court determines the amount, priority, location, and beneficial uses of the water right and whether owners may change or add to their water rights. The local Water Commissioner performs the daily administration of water rights by priority within available water supplies. The Water Commissioner can issue orders to restrict water diversions or storage if it is deemed necessary to satisfy senior rights.
Purchasers should also consider the many types of water rights and inquire as to the type they are purchasing. Examples include: surface water rights, stream flow diversions (including "in-stream"), and storage.
Property owners considering sustainable water practices such as recycling grey water or harvesting rainwater must also be aware of Colorado water law. For example, a homeowner who wishes to recycle the grey water produced by her home in order to reduce her dependence on groundwater should realize that in Colorado grey water is governed by the same regulations as black water (sewage) and requires permitting and testing by the Routt County Environmental Health Department.
The collection and storage of rainwater also poses obstacles to the homeowner. The primary question is whether your roof is considered a “tributary,” a hydrologic structure from which water flows to a creek, to the Yampa, to the Green, Colorado, to… California. The hydrologic reality of rooftop rainwater harvesting means that the use of the water is subject to the principles of the Colorado water rights briefly outlined above. Do you have a “right” to collect that water from your roof above downstream and senior water rights? The answer is likely maybe.
Navigating this system requires investigation, documentation, and some technical and legal expertise. Not to fear, as there are many who have been through this process before you: neighbors, knowledgeable real estate agents, and the agricultural community are great resources. For more information, a useful publication introducing the principals of Colorado Water Law is The Citizen's Guide to Colorado Water Law, 2nd Edition, published by the Colorado Foundation for Water Education and available online at www.cfwe.org. Always take the time to investigate potential water rights issues prior to purchasing land or attempting to build on a property. 
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