In Oregon, water is the lifeblood of a property’s value and utility. Whether you’re buying a farm, a ranch, or a rural homesite, the water rights attached to it are often more critical than the structures on it. But making one of the most common mistakes, assuming a water right on paper guarantees usable water, can lead to disastrous consequences.
A “paper” right doesn’t mean you have “wet” water. It doesn’t mean the well is functional, or that you have legal access to the ditch that carries your water.
Proper due diligence is not just recommended; it’s essential to protect your investment. This checklist will guide you through the critical steps of investigating a property’s water rights, from the paperwork to the pump.
Phase 1: The Paper Trail – Document Review
Before you even walk the property, the investigation begins with the documents. This phase is about verifying the legal standing and history of the water right.
- Obtain All Water Right Documents: Request copies of all water right certificates, permits, decrees, and applications from the seller. You can also search the Oregon Water Resources Department (OWRD) online database.
- Verify the Priority Date: This is the birthdate of the water right. In Oregon’s “first in time, first in right” system, an older priority date is more valuable and less likely to be curtailed during water shortages.
- Confirm the Place and Type of Use: Does the certificate authorize irrigation on the exact fields you plan to farm? Does it allow for the industrial use you have planned? Any discrepancy between the legal description and your intended use will require a formal transfer.
- Investigate Forfeiture Risk: A water right that hasn’t been used for five or more consecutive years is at risk of being forfeited by the state. Ask the seller for proof of continuous use, such as power bills for pumps or dated aerial photos showing irrigation.
- Review the Title Report for Encumbrances: A title report will show if the water rights have been pledged as collateral or if they have been sold separately from the land. It’s crucial to ensure the water rights are being conveyed free and clear with the property.
Phase 2: The Physical Truth – On-the-Ground Inspection
Once the paperwork checks out, you must verify that the physical reality matches the legal documents.
- Locate the Point of Diversion: Find the exact well, headgate, or pump location specified in the water right. A professional surveyor can use GPS to confirm it is in the correct legal location. A diversion that has been moved without OWRD approval is illegal.
- Inspect the Infrastructure: Thoroughly examine the condition of all water delivery infrastructure.
- Pumps & Pipes: Are they functional or in need of major repair?
- Ditches & Canals: Are they well-maintained and clear of debris?
- Verify Legal Access and Easements: This is critical. If your ditch or pipeline crosses a neighbor’s property, is there a formal, recorded easement that guarantees you access for maintenance and repairs? An unwritten, “handshake” agreement is a major red flag.
- Assess Well Health with a Flow Test: For groundwater rights, a well flow test is non-negotiable. This test determines the well’s production rate (gallons per minute) and can reveal potential issues with the pump or the aquifer itself.
Phase 3: The Final Verdict – Professional Analysis
You’ve gathered the documents and walked the land. The final step is to have an expert interpret the findings and identify any hidden risks.
- Consult the Local Watermaster: The OWRD Watermaster for the basin can provide invaluable context on local water availability, history of conflicts or “calls” on the river, and any known issues with the specific right you are investigating.
- Commission a Professional Due Diligence Report: This is the most important step to protect your investment. A comprehensive due diligence report, prepared by a water rights professional, synthesizes all the above information, legal documents, physical inspection, and regulatory context, into a single, clear assessment. It will confirm the validity of the right, quantify any risks, and recommend actions needed to secure the water for your intended use.
Don’t Buy Blindly
Navigating this checklist requires a unique combination of legal research, surveying skills, and deep knowledge of Oregon water law. A mistake in any one of these areas can cost you dearly.