What are water rights?

In Colorado, water rights are real property rights that can be bought and sold independent of land. Water rights are “usufructuary” rights, meaning the property right is not a right to specific water itself, but rather a right to divert a quantity of water in accordance with a priority date. Water rights are documented by a Water Court “decree” that can only be issued by one of seven specialized Water Courts throughout the Colorado river basins. Water Court decrees describe where a water right can be diverted, the uses to which it can be placed, the amounts of water that can be diverted, and, most importantly, the “priority” of the water right in comparison to other water rights. This legal system is known as the Prior Appropriation System. The mantra of the Prior Appropriation System is “first in time, first in right.”

The Prior Appropriation System establishes how the physical supply of water in a stream is allocated among the owners of water rights based on the priority date of each owner’s water right. Older water rights, often referred to as “senior” water rights, are entitled to receive water prior to the water rights that were appropriated later, or “junior” water rights. An appropriation is made when someone takes water from a stream or aquifer and places that water to beneficial use. There are many types of water rights: rights of surface diversion, ground water (including tributary, nontributary, and not nontributary), storage, exchange, and augmentation. Water rights can be characterized as “conditional” or “absolute,” depending on whether the water right has actually been placed to a beneficial use. Water rights can also be changed to allow for new types of use, places of use, or points of diversion by filing an application for a change of water right. There are seven Water Courts in Colorado (one in each of the major stream basins) that adjudicate water right applications.