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Do a need a surveyor? How about water rights? A few tips on purchasing land.

We’ve heard some incredible land stories, many of them positive. However, we’ve also heard of landowners who have made crippling mistakes, many of which could have been avoided quite easily. For example, we know of one landowner who purchased a parcel and then built a cabin on it, later to discover that the section on which the cabin was built was never his property. This anecdote illustrates one of the biggest and most common land purchasing mistakes: not hiring a surveyor.

A land surveyor’s primary responsibility is to determine and accurately notate the legal boundaries of a land parcel. Although surveyors do visit the land, they don’t only do fieldwork. They can choose one or more of many surveying specialties, and they work in offices, with people and government bodies, and, yes, out in the field. Surveyors use current and emerging technologies, especially the newest GSP systems and 3D laser scanners.

It is extremely common for people to purchase land without knowing its exact boundaries. Don’t make this mistake. A surveyor will give you a plat map (a three-dimensional drawing of the property) and mark its boundaries so that you know exactly what you’re purchasing.

Another part of knowing what you are purchasing: water rights. Wherever land is irrigated, water rights are especially important. A water right is what it sounds like: your right to use and/or irrigate water from a source, such as a well, stream, or lake. In California, water rights are determined based on prior appropriation, which means that water rights are bought and sold separately from land. Water rights can be mortgaged just like property. The first person who uses some quantity of water for industrial, household or agricultural purposes may continue to use that quantity in the future. The next people to use the water can use as much as they need for the same purposes as long as they don’t interfere with the pervious users’ rights. This order is based on appropriation dates: the first person has the earliest appropriation date; the second has the second earliest, and so on.

In times of drought, this prior appropriation system can leave some people with insufficient water supply. Different states have different provisions for this problem, and in highly populated areas, a government agency often allocates the water supply.

Land banking purchases happen in less populous areas. The water rights you may choose to purchase will be sold with their original appropriation dates; that is, you may purchase a water right with an appropriation date of 1910, and you will have priority of usage (for beneficial purposes) over someone with an appropriation date of 1925.

The water rights that are available in the proximity of your land parcel can determine its likelihood to be developed. When you research your land parcel, find out which water rights are available for purchase. Even if you yourself don’t purchase them, developers who work in the area may decide to use your parcel based on the water rights they can buy from someone else.

In closing, hire a surveyor, always. Water rights? That depends on your case. We’d love to hear your thoughts! Contact us for more information about knowing your property.

This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. Please consult with a professional specializing in these areas regarding the applicability of this information to your situation.