Montana Water LawDecember 1, 2020
A Buyers Guide to Montana Water Rights
By Jacy Suenram of Suenram and Bergeson Law Offices
Water right holders possess the right to use the water. Water rights are afforded the protection of the United States and Montana Constitutions, just like any other property right. The governing law for adjudication of water rights and resources in Montana is the prior appropriation doctrine – applying the rule of “First in Time is First in Right”. The prior appropriation doctrine originated in the Western states to accommodate the irrigation and mining needs of a developing west. Under the prior appropriation doctrine, a water user must have a water right to appropriate water from a stream or groundwater source.
As such, even if a stream or ditch runs through your piece of property, if you do not have an established water right for use of that water, diversion by you violates Montana law and doing so could result in a trip to the District Court or Montana Water Court! As such, water rights in Montana are claimed based on when the water was put to beneficial use, also known as its “priority date.” Historical documentation and institutional knowledge support the priority dates of Montana water right claims. The importance of the priority date is the ability to "call" water by senior water right holders. Calling water means that the senior water right holder can require the junior water right holders to stop diverting water to fulfill the senior water right holders’ needs. In a nutshell, not all water rights are created equal. Some of the senior water rights in Montana date back to the 1860s!
When buying water rights in Montana, the general rule of thumb is that “water rights run with the land.” While this is the usual practice, water rights can be transferred to a new place of use. Any change in the purpose, place of use, acres irrigated, or place of diversion of a water right must first be approved by the Montana Department of Natural Resources and Conservation (“DNRC”). Before 1973, if you wanted to change the place of use, purpose, or point of diversion, you were able to do so without having to file for the change. The burden of showing your change caused a negative impact was on the party negatively impacted. On July 1, 1973, the Montana Water Use Act became effective. The Montana Water Use Act did not alter basic water right concepts, but tasked the DNRC with overseeing the procedure for acquiring and changing water rights. If you want to change a water right now, the burden is on you to prove it will not interfere with anyone else’s water use. Filing water rights in Montana is governed by the DNRC and the adjudication of water rights is handled by the Montana Water Court. A great on-line resource for understanding more about Montana waters rights law and history can be found at https://leg.mt.gov/content/Publications/Environmental/2014-water-rights-handbook.pdf
As you may be gathering, the water rights claims attached to a piece of land are an important aspect of the due-diligence inquiry. You must keep in mind that just because a piece of land has a water right, does not mean that it necessarily has the appropriate water. It is crucial you are aware of Montana water rights law and how Montana water law processes work when contemplating buying property in Montana. 18 Land Company can simplify water right due- diligence and if needed, refer you to a water right consultant or attorney to ensure you are purchasing the property (and water rights!) of your dreams.
We welcome you to contact us if you’d like more information or have questions.
Here are some additional resources to help you through land transaction decisions:
How to Start a Successful Montana Ranching or Farming Operation
Navigating a Montana Land Sale: Do I need a broker or realtor?
Five Tips for Listing Your Farm or Ranch Property