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Sellers Beware??? Kent Askren
Feb. 2009
Water
right issues dealing with easements, eminent domain,
applications and permits have been boiling over for the
last year or so. We’ve been working these issues with
agency staff and through legislation which we’ll report
in more depth at a later date. But this seems like an
appropriate time to share some lessons learned to help
others who may face similar circumstances.
To
begin with, let’s review a few of the basic premises of
our water law to help formulate our thought process on
these issues. We have a very mature water law in Kansas
with its foundation in the Kansas Water Appropriation
Act established in 1945. This Act follows the doctrine
of prior appropriations which rewards the priority of a
water right, in essences the “first in time is the first
in right”.
Another
fundamental premise of our water law is that water
rights are real property rights. We as individuals do
not own the water but we do own the water right which,
once established, attaches to the property upon which
water has been lawfully used in association with the
water right.
Nearly
all uses of water require filing for and receiving a
permit from the Chief Engineer of the Division of Water
Resources (DWR) before a water right can be developed.
The primary exception to this rule is water used for
domestic purposes which are not required to have a
permit but are developed by simply putting water to
beneficial use. You may make application should you
desire to do so and have that domestic use made a matter
of record; it’s just not a requirement and is not needed
to establish the right.
Okay,
enough water basics, now to the issues. We’ve been
approached by several members who have had some
experiences we can all learn from. First of all, if
anyone who has the authority to exercise eminent domain
approaches you to negotiate for your land, seek legal
advice. If you have established water rights on all or
part of the land being sought you need to determine if
the entity wants just the land or the water right too.
For
example, if the land they seek is for a road improvement
project, more than likely they are not after your water
right. If so, you need to separate the land they wish
to take from your water right before the entity
establishes ownership. This can be done by contacting
your local DWR field office and seeking assistance in
completing an application to change the water right or
by voluntarily reducing the right. Unless you do this,
the entity exercising eminent domain will become a
co-owner of an undetermined interest in your water
right.
There
are also situations where you might be approached
regarding an easement on your land to access a water
supply. If you and the entity can work out a mutually
agreeable contract that’s great but if that entity
decides later on it would prefer to own your land rather
than abide by the lease agreement, you may want to seek
counsel on how to protect your interest in advance
through the easement contract.
Whenever eminent domain is utilized, there must be a
determination made to value the land being taken. When
the ultimate goal is acquiring land for the development
of a water right, often times the land valuation is not
adequately established and the landowner is taken
advantage of. Remember, our water law says that we do
not own the water, but there is still an inherent value
in owning the land which allows access to a water
supply. Somehow this must be considered in the
valuation of the property being taken when the purpose
is for the future development of a water right.
There
seems to be a generally accepted practice of placing
enhanced value on land being taken for which a water
right already exists and the ultimate objective is to
secure the water right by the entity exercising eminent
domain. Consequently, if you fall into this category,
it is less likely that you will be unfairly compensated
than someone who has not yet established a water right
on their land and the entity is simply looking for a
“cheap” water supply.
Another
situation that has come up involves entities filing
application for permit to appropriate water with the
Chief Engineer on land which they do not have legal
access or control of the property in question. In fact,
in some instances, these entities have been successful
in having the Chief Engineer grant approval of their
application without such access or control.
We
brought this oversight to the attention of the Chief
Engineer but no correction was made. Consequently we
exposed the details to the legislature and they have
seemed very receptive to correcting this flawed process
by the agency and hopefully legislation will soon be
passed so that this taking will no longer occur.
We’re
all aware of the benefits that roads, bridges and
pipelines have on our lives. It is not anyone’s desire
to be at the center of an eminent domain issue but when
it does occur we need to ensure that the appropriate use
of eminent domain proceedings with due compensation has
occurred.
We also
must be careful to have contracts and easements properly
prepared to protect our interest with full knowledge of
what might happen years down the road when it becomes
more economically attractive for the entity to exercise
eminent domain rather than abide by the contract they
negotiated.
In this
case instead of the old “buyer beware” it really boils
down to “seller beware and informed”.
Comments?
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