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Water Rights Resources

Water law is complex, nuanced, and can be difficult to understand. We delve into common water law concepts and provide tutorials that describe how it use publicly available tools to learn more about water rights. To this end, below are a series of articles that are designed to help parties develop a general understanding of some of the basic principles of water law. The information provided below is for educational purposes only and if you have specific questions about your water rights, please contact the attorneys at Nazarenus Stack & Wombacher for legal advice. Use of this information is explicitly subject the website disclaimer available at this link https://www.nswlaw.com/disclaimer

Absolute v. Conditional Water Rights

When a water right is confirmed by a water court it can be either a “conditional” water right or an “absolute” water right.  The main differences between these classifications of water rights are detailed below. 

Absolute Water Right

An absolute water right is confirmed by the water court when an applicant proves that he or she has placed a specific quantity of water to beneficial use.  The appropriation date for the water right is based on the date that the applicant shows the water was first placed to a beneficial use. 

Water courts will not confirm a water right that is “based on the speculative sale or transfer of the appropriative rights to persons not parties to the proposed appropriation.” C.R.S. § 37-92-103(3)(a).  This is because Colorado has a policy of maximum and optimum use of water so that the public’s water resources can serve as many beneficial uses as possible. As such, a water right can only be created for bona fide demands and not for purposes of speculation.   This is known as the anti-speculation doctrine.  As one court described it, “[o]ur constitution guarantees a right to appropriate, not a right to speculate.”  Colo. River Water Conservation District v. Vidler Tunnel Water Co., 594 P.2d 566, 568 (Colo. 1979). 

Once an absolute water right is confirmed, the owner has the right to divert and beneficially use that water in accordance with the terms of the water court decree and the prior appropriation system.

Conditional Water Right

A conditional water right is “a right to perfect a water right with a certain priority date upon the completion with reasonable diligence of the appropriation upon which such water right is to be based.” C.R.S. § 37-92-103(6).  A conditional water right allows an appropriator to establish an appropriation date for a water right prior to actually diverting that water and placing it to a beneficial use.  A conditional water right is typically sought when significant investments in time and money are necessary before the actual beneficial use can occur, such as with the construction of a large reservoir.  Thus, a conditional water right protects the appropriator’s investment by providing certainty about the priority of the water right and the amount of water that can be diverted at such time as the project is constructed.  

In order to establish a conditional water right, the applicant must establish “the concurrence of an intent to appropriate and the performance of overt acts in furtherance of that intent.”  N. Colo. Water Ass’n v. Three Peaks Water, Inc., 850 P.2d 836, 839 n.2 (Colo. 1993).  This is commonly called the “first step” doctrine.  The applicant must also convince the water court that there is a reasonable likelihood that the water right “can be and will be diverted, stored, or otherwise captured, possessed, and controlled and will be beneficially used and that the project can and will be completed with diligence and within a reasonable time.”  City of Thornton v. Bijou Irrigation Co., 926 P.2d 1, 42 (Colo. 1996).  This requirement is known as the “can and will doctrine.”  As with absolute water rights, an applicant for a conditional water right must also prove that it has a bona fide demand for water and that the claim is not speculative.

Owners of a conditional water right are required to file a new application with the water court every 6 years in order to update the water court on the status of the water right and prove they are making progress towards the development of the water right.  This type of application is known as a ‘diligence application,’ and if it is not filed prior to the deadline dictated by the water court decree, then the conditional water right will be canceled by the water court.  In a diligence application, the applicant is required to describe the work that it has done towards beneficially using the water.  This work can include the construction of relevant facilities, governmental approvals, work done to protect the conditional water right from the effects of other water rights, and any other investments of time and money that provide evidence that the owner is making diligent efforts to complete the appropriation.  An applicant in a diligence proceeding can also request that all or a portion of the conditional water right be made absolute if they have been able to divert and place the water right to its decreed beneficial uses.  The owner of a conditional water right is required to file a diligence application every 6 years until such time as the conditional water right is completely converted into an absolute water right or the owner chooses to abandon any portions of the water right that remain conditional.

Parties that purchase conditional water rights should also be aware that they must notify the appropriate water court of the transfer of a conditional water right.  This will ensure that the court can send notifications of the diligence deadlines to the owner of the conditional water right.  You may need a water attorney to assist with that filing.

The attorneys at Nazarenus Stack & Wombacher LLC are available to assist  you with questions about absolute or conditional water rights or navigating the diligence process for conditional water rights. 

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