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Water Share Owners, Do you want to gain-or lose- if you sell your water?

Water Share Owners, unless you know your rights, you stand to take significant losses when you sell your shares.

Do you want to gain – or lose – if you sell your water?

If you sell your Consumptive Use (CU) amount, do NOT agree to a dry-up covenant. You retain the right to “use the margin between CU and Allotment Quantity (AQ).”

The margin between AQ and CU can be as much as 50% more than the CU.
Or, in dollars let’s say your CU might be worth $120,000 per share and your AQ $240.000 per share.
Should you agree to sell your AQ, that ends your use of your Water.

Here’s what you need to do:

  1. Secure copies of your original yearly (annual) quantity (*Allotment Quantity) *Water, and original date of *Adjudication.
  2. Determine which you want to sell: Allotment Quantity or *Consumptive Use.
  3. *If you sell your Consumptive Use, you retain the right to use the margin between your Consumptive Use and Allotment Quantity.
  4. In drought, change of crop etc., Owner has the right to use up to (*Supplement), not exceed, their Allotment Quantity.
  5. If you sell your Consumptive Use, make sure buyer does not include verbiage such as; Dry-Up Covenant. Instead, include verbiage such as: I retain the right to use _ _ acre feet.
  6. Should you sell your Allotment Quantity, buyer may include verbiage such as Dry-Up Covenant; you lose rights to use all your Water. You may agree to an annual lease back.
  7. Should you sell your Allotment Quantity and agree to a lease back, make certain buyer assumes responsibility for ALL Ditch Company assessments thereon.


  • Water: Our forefathers put “Water” (ground & surface because they’re connected) to beneficial use.
  • Allotment Quantity (AQ). Water was recorded as an Allotment Quantity. They could not predict Consumptive Use.
  • Consumptive Use (CU): Amount you use on certain crop. There’s no such thing as “historic” Consumptive Use, for many reasons including crop rotations.
  • Adjudication: When our forefathers put “Water” to beneficial use, they were given a “Date of Adjudication.”
  • That “original date of adjudication” stays, regardless a later well (or ditch diversion) date.
  • Supplement: Upon selling a Water Share, owner may sell their AQ or CU. If owner sells their CU, they have the right to use the margin between.
  • Owner may supplement that demand with well (or other) water. (c) The use of groundwater may be considered as an alternate or *supplemental source of supply for surface decrees entered prior to June 7, 1969, taking into consideration both previous usage and the necessity to protect the vested rights of others. C.R.S. 37-92-102 Legislative declaration basic tenets of Colorado Water Law.
    CO Rev Stat § 37-92-102 (2016) 

(a) Water rights and uses vested prior to June 7, 1969, in any person by virtue of previous or existing laws, including an appropriation from a well, shall be protected subject to the provisions of this article.

Colorado Constitution Water Law


Article XVI. Sec. 5. The water of every natural stream, not heretofore appropriated, within the state of Colorado, is hereby declared to be the property of the public, and the same is dedicated to the use of the people of the state, subject to appropriation as hereinafter provided. § 6. The right to divert the unappropriated waters of any natural stream to beneficial uses shall never be denied . . .

Prior Appropriation is also known as First in Time, First in Right.

The State of Colorado Division of Water Resources is required to Administer Water in Prior Appropriation.

If State does not Administer Water in Prior Appropriation, the risks State Water Engineers take include: Violates Law; over appropriation of Water (Many consider that Colorado Water was fully appropriated by about early 1900’s); artificially raising and or lowering Water tables; engage in Takings Without Just Compensation.

General Notes

Government can take water by eminent domain, but Government is required to:

  • a)Pay for it. Can’t take your property without paying you for it; known as Just Compensation.
  • b) Have a legitimate government use.
  • c) Identify the reason for taking water.
  • 3) Until you’re paid, it’s still your property. They can’t tell you how to use your property.
  • e) Due process – your day in court. You have to receive due process.
  • f) Even ESA requires due process and must pay. Can’t just turn a valve and shut off water.
  • g) Constitution requires it. If private citizens are forced to give up property to support an ES, it’s a regulatory taking, which is a “takings without Just Compensation.”