What to ask your real estate agent about water in Colorado

Potential property owners are often not asking enough questions about water, experts say – and it can end up being a costly mistake.

When someone buys a property in Colorado, they can find themselves thrust into the complicated world of Western water. People looking in towns and cities might need to learn about providers and rate changes. Those interested in empty lots, unincorporated areas of counties or rural areas of the state might need to study up on water rights, wells and irrigation.

If they’re prepared, buyers will reach out to experts, and even attorneys, to understand the ins and outs of their new water supply before signing a deal. If they’re not, they could end up in the middle of a fight or with an expensive liability.

“There have been neighborly confrontations over water,” said John Wells, a broker and owner of the Wells Group in Durango. “I’ve seen people turn other people’s ditches off, locking their headgates, unlocking their headgates. It doesn’t make for a good neighborly situation.”

Western water law is frequently confusing – even for experts and real estate agents. Interested buyers coming from out of state are often used to a completely different system of managing water. Urban residents looking to move into rural Colorado might have little experience with ditches, ponds or water law.

“Most brokers don’t understand it because it’s complicated and confusing, and it doesn’t really impact their client’s ability to purchase a house,” said Aaron Everitt, a Fort Collins-based broker and developer with The Group Real Estate.

But skipping past a thorough review of water assets can leave buyers with frustrating problems. They might face water bill increases, lead pipes or leaky sprinklers. For more rural properties, a typo or missing signature in a water or land deed can take an extra month to fix. Ponds and reservoirs on a property might actually be illegal water storage – which could take a court process or big dollars to resolve, said Bill Wombacher, an attorney with Nazarenus, Stack & Wombacher, who teaches a water law class for real estate agents.

New property owners might be surprised to see a stranger in their backyard clearing out a ditch – or, as happened in 2022 in Kittredge, dozens of people using private property to access a popular creek running through private property, which prompted a debate about public access.

It is easier to handle any water questions that come up before a deal is signed, and buyers might want to budget extra time in the purchase process for tasks like well inspections, said Amanda Snitker, chair of the market trends committee for Denver Metro Association of Realtors.

One piece of advice: “Be sure they’re being thorough. Don’t be afraid to ask questions, even though they might seem silly,” Wells said. “There’s no silly question when it comes to water.”

So what kind of questions should a buyer ask? The Colorado Sun asked the experts to break it down.

People interested in buying a home, apartment or townhome in a more populated area – like a town, city, special district or planned development – should start by understanding their water supply and who provides it.

If so, it can save money for the buyer. Tap fees, the cost of adding a new connection, can be as low as $1,500 to $8,000, said Wells, who works in small towns and rural areas in southwestern Colorado. Or, the price of tapping into the water system could be more like $50,000 in areas of the Front Range or $200,000 in some areas of the Western Slope where water supplies are tight, Wombacher said. Some water providers can also freeze adding new connections when their water system or supply is maxed out.

Some areas come with more established networks of pipes, canals, tunnels and reservoirs operated by a water provider. These water districts and utility providers are public entities, and buyers should know how functional or dysfunctional the organization is, Everitt said.

It’s also helpful to understand if the organization is planning to build new water infrastructure or has a backlog of needed repairs, Snitker said. The cost of water and related fees can vary depending on the water provider, and it’s good to know those details up front, she said.

The experts also recommended learning about wastewater systems, water quality and any water-related expenses that could come up for new owners. Here are some questions they recommended asking:

Not all properties lie within an established service area for a water provider, like homes in unincorporated areas, rural counties and some new developments.

Homes, ranches and land in rural areas also might come with water rights – a complicated part of how Coloradans access water.

When a buyer tours a property, they should keep an eye out for certain features to know what to ask: Look for wells, ponds, lakes, ditches, streams, irrigation systems and other outdoor water features, experts said.

Colorado is covered with a decades-old network of ditches that help transfer water to farmers, ranchers and communities around the state. These are often earthen, straight and clearly human-made, but they can also be easy to miss.

For Wombacher, ditch easements are the single most-frequent source of frustration among his clients, he said.

They are tied to a complicated system of water rights, which means ditch users have legal rights to receive a certain amount of water at specific times and locations during the year.

Ditch managers and users can move up and down the channel, even on private property, to do maintenance and manage water supplies.

That means property owners might see water flowing, but it’s not theirs to use. They cannot disrupt the transfer of water, use ditch water or move the ditches (unless they go to water court). If that does happen? “It’s like an immediate lawsuit every single time,” Wombacher said.

Questions to ask:

“There are quite a few unlawful uses going on out there, particularly with ponds and reservoirs,” Wombacher said.

Property owners build water storage and sometimes do not go through the water court process to get a legal right to access, store and use the water.

“Just because a seller has been able to get away with something for a long time, doesn’t mean the buyer will,” Wombacher said. “Anytime there’s a water use going on on a property, you want to make sure as a buyer that it’s a lawful use.”

The state of Colorado regulates wells, and well permits come with specifications about how much water can be used and what it can be used for.

Interested buyers should start by learning about water court decrees and permits related to the well. The state has databases that can provide more information about a well using its permit number.

Adding new wells can be expensive and come with limitations based on the location and characteristics of a property, like whether it is larger or smaller than 35 acres, experts said. Buyers will also want to ask about any water quality, contamination or pressure issues in advance.

Questions to ask:

If there is not a well – and a buyer might want one – what are the options for getting a well?

Does the well produce the amount of water stated in the permit? If not, the property might need a cistern.

“Just like you do a home inspection, you call someone and they do a well inspection,” Snitker said.

Many properties, especially in rural areas, come with irrigation water supplies – and therefore, water rights.

Water rights can add value to a property, but they also come with restrictions related to where, when and how much water can be used. These rights are legally tied to certain beneficial purposes, like farming, drinking, snowmaking, fire prevention and more.

“I think a lot of lay people, and it’s not their fault, think they can use water anytime they want,” Wells said.

Some water rights are also more valuable than others: Under Colorado water law, more recently established “junior” rights get cut off first when water is short so older and more valuable “senior” rights get their share.

Don’t need irrigation water? A property owner has to go to water court to change details of a water right. And a new owner can’t just own a water right and plan never to use the water for its intended purpose. If that happens, the state might analyze whether a right has been “abandoned,” which could dissolve the right.

Water rights are often transferred from one owner to another using a deed or a title. New buyers should check to make sure these documents are in good order, Wells said.

“Sometimes it’s prudent to hire a water attorney to make sure that what is in the deed matches what you’ll actually be sold,” he said.

Questions to ask:

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