What Are Water Rights?

Water Rights Explained

A woman stands next to a lake.

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Water rights are legal permissions you obtain to use reasonable amounts of water on, adjacent to, or away from your property for beneficial purposes. Water rights rules determine if you can access and how you can use a body of water that’s connected to your property or that you’ve claimed.

Learn more about the different types of water rights and how they can impact your ownership of waterfront property or regulate your water usage.

Definition and Examples of Water Rights

Water rights dictate how property owners are allowed to use sources of water that surround and connect to their land or water sources not connected to their land. Most water rights laws allow for “reasonable” use of the water (like swimming, fishing, or farming) but restrict activities that could interfere with other landowners who share the same body of water.

Water rights also help protect the environment from damage that can occur as a result of someone creating a water diversion.

  • Alternate names: Riparian rights, prior appropriation

How Water Rights Work

Water rights protect the natural flow of water and the environment as well as ensure that neighboring property owners are not negatively impacted. In the eastern U.S., water rights are typically based on land ownership: If the water is on or touches your land, you have rights to it (in most cases). 

In the West, water rights are not tied to land ownership. Instead, they involve a permit system that ensures that water sources are put to beneficial use by owners and that senior owners are given priority, even during times of water shortages. 

Water rights can be very specific, regulating the quantity of water you’re allowed to divert for irrigation, for example.

In some states, water rights are separate from land ownership and rely on a permit system.

Types of Water Rights

There are two main types of water rights. In most eastern U.S. states, where water is more abundant, riparian rights are prevalent. In most western states, however, water rights work on a permit system known as “prior appropriation.” A few states use a hybrid of the two water rights approaches.

Riparian Rights 

The simpler water rights laws are called riparian rights, which are based on land ownership. If someone owns property that is connected to a river or stream, the owner generally has a right to that water source. States and localities can regulate how much water can be used and in what way. There’s also a similar type of water rights called "littoral rights." They work much in the same way as riparian rights, but are related to bodies of water that are contained, like ponds or lakes. Riparian rights are used by most eastern U.S. states.

Prior Appropriation 

This type of water right is based on the concept of “first-in-time, first-in-right.” In other words, the first person to lay claim to a water source gets the water rights. Others can also buy rights to the same body of water but priority goes according to seniority. Each rights owner must follow requirements set forth by their state.

In general, the water must be put to “beneficial” use, which can include domestic, agricultural, industrial, or recreational. What sets these types of water rights apart from riparian is that prior appropriation rights are separate from land rights. Western states that do not have as much rainfall or natural bodies of water generally follow prior appropriation.

Private groundwater rights are a genre of water rights that regulate underground water sources. Various rules and doctrines dictate regulations regarding private groundwater rights, including absolute dominion, correlative rights, prior appropriation, and reasonable use.

Do I Need Water Rights?

It depends on where you live. Water rights are defined differently in each state or by local governments. In general, water rights are more regulated and expensive in states that use prior appropriation rules.

Pros and Cons of Water Rights

  • Protect the environment

  • Help ensure that water can be a shared resource 

  • Some water rights can be sold for profit

  • Laws can be confusing

  • Permits can be expensive

Pros Explained

  • Protect the environment: Because water rights regulate how bodies of water are used, it can help prevent major disruptions to any marine life and the surrounding ecosystem.
  • Help ensure that water can be a shared resource: In states that follow riparian rights, owners cannot manipulate the water in such a way that it negatively impacts others downstream or upstream.
  • Some water rights can be sold for profit: Especially in prior appropriation states, water rights can be used as an investment vehicle.

Cons Explained

  • Laws can be confusing: Like anything involving legal rights, it’s important to understand the fine print, especially if your area has complex water rights rules. 
  • Permits can be expensive: The cost of water rights varies widely and fluctuates. In areas that practice prior appropriation, expect prices to be high. In California, for example, water rights can cost more than $30,000.

What It Means for Property Owners

Water rights may be a bigger deal for property owners in prior appropriation states or for those who want to divert water for farming or commercial uses versus someone who buys a home and simply wants to use the attached lake for swimming or boating. 

In states that follow riparian rights, the water rights come with land ownership, and you may or may not need a permit depending on the locality. However, in prior appropriation states, water rights are not attached to land purchases and will likely involve more specific regulations.

Water rights questions are worth clarifying if you are buying land that is connected to a body of water or if you want to purchase water rights in prior-appropriation states.

Key Takeaways

  • Water rights involve how property owners are allowed to use sources of water that surround and connect to their land. 
  • The purpose of water rights laws is to protect the environment and ensure that water is being used fairly and appropriately.
  • There are two main types of water rights: riparian (tied to land ownership) and prior appropriation (separate from land).
  • State and local water rights laws vary, so be sure to understand your rights to avoid fines or legal disputes.