Water rights a major issue for ranchland buyers in the Yampa Valley

“Nine times out of ten buyers do not understand the significance of Colorado water law and deeded water rights,” says Ren Martyn, Steamboat Sotheby’s International Realty Broker Associate. Martyn specializes in ranch brokerage, water rights and land conservation and has an in depth knowledge of western water law. He not only talks the talk, but lives on a ranch south of Steamboat Springs with his wife, Heather and three boys, Andrew, Ryan and Lander. So he knows a thing or two about ranch living in the Yampa Valley.

Martyn will tell you that a lot of his clients—especially the ones that are new to the West—think of water as something that flows out of the tap whenever you turn on the faucet. But the fact is, as the demand on Colorado’s water supply continues to grow, water has become an increasingly finite—and precious—resource. Factors like Front Range population growth, agriculture, energy development, climate change, recreation and environmental conservation are all competing for Colorado’s water supply.

In the Yampa Valley, water is crucial to the continuity of local agriculture and the preservation of our ranchlands. Water rights and the allocation of water usage in Colorado is a highly complex and controversial issue. But it’s also critical for potential buyers to understand (at least on a fundamental level) how these issues might impact a real estate transaction and stewardship of the land.

To help us clear the air—and the water—we sat down with Ren Martyn to get the 411 on the H20.

Where do we even begin? Water rights and usage are such a complicated and controversial issue. Anytime I work on a property that has water rights issues, most buyers have no idea about the significance of water. Many of these ranches are being sold to folks who are not from this area. Everyone has heard that water is important, but they don’t really know what that means.

Let’s start with the basics. When we look at water rights, first we have to look at how much water is there, seniority of the water right and what the appropriate uses are for that water. Is it for irrigation? Livestock? Domestic use? Then you have to look at what year that water was appropriated and what water rights may be adjudicated with the particular acreage.

Appropriation of water rights in Colorado is pretty complicated, right? Give us the basics. The Colorado Water Compact is an agreement that was made in 1922 among seven states in the Colorado River Basin that govern the allocation of water rights from the Colorado River. Any water rights that were obtained before the compact in 1922 guarantees senior water rights.

Yikes. That seems like a long time ago. Do a lot of properties that have senior water rights? We do have a fair amount of pre-compact water, but overall the Yampa watershed is a junior right to many other deeded waters in the overall Colorado watershed. I have to educate my clients to the significance of this. There are a lot of landowners now that don’t realize you have to submit records to the Colorado Division of Water each year. It’s really important to keep your water rights active. I’ll cross-reference what I’ll receive from real estate deeds to what’s in the division records. Nine times out of ten, the records don’t line up. A lot of my work is updating real estate and division records.

What about actual water use? Are some of these ranchlands restricted in how much water they can use in a year? What people don’t realize is the amount of water they were allotted was appropriated in the best of times. The amount of water the original rancher filed on may translate to half of what it was because of how much total water is in the system in a given year. During a drought, and we’ve been in a drought cycle for many years, there may only be 75% of that original amount available.

What are some of the threats to our watershed? Agricultural water rights are the majority of deeded water rights and in essence the low hanging fruit because they can be easily acquired. In the past, oil and gas companies have acquired agriculture water rights for their needs. Another threat to our watershed is the potential for a Transmountain Water Diversion, a network of tunnels on the West Slope that deliver water to the Front Range. In Routt County, there are no Transmountain Diversions but as the Front Range population continues to grow, the Yampa River water may be targeted for the development of a Transmountain Diversion pipeline.

Has that ever happened? It would be very costly, but our water supply could be heavily allocated if there were ever a [state mandated] compact call. It could potentially limit future development for this region. As western populations increase and drought continues, the potential for a compact call increases.. In addition, the Front Range has a much bigger population base, and therefore, more voting power. It’s all up to the state legislature and fortunately there are processes to make our recommendations to the state.

What about locally? Is there competition for water within the Yampa Valley itself? Steamboat Springs filed a recreational in-stream diversion in 2002 for their kayaking water features so they can make a water call for more water if there is a low flow in the Yampa River. The Colorado Water Conservation Board also has in-stream flow rights to protect the fish habitat. For specific reaches, maintaining the health of the river may trump all water rights. So if the Yampa River gets below a certain flow level, diversions out of the river are shut down until we get a rainstorm and the flow is restored.

Then there are rivers that are over-appropriated, like the Elk River, where there are more water rights than there is water. Last few years, water rights are being strictly mandated and it’s been a wake up call for everyone. I’ll often use the Elk River as example to explain to land owners what’s coming.

What about climate change? On top of everything else, you have to look at what’s happening in California and the threat that has to Colorado’s water. We are still part of the Colorado River Watershed, which means we share our water supply with six other states, some of which are in a serious drought. That could definitely pose a huge threat to our water supply.

What can we do to protect our water? We all need to work together to keep this water here. You would think there would be a lot of competition for water here in the Yampa Valley between agriculture, recreational and municipal users. But one thing we are all in agreement on is to keep our water here in our watershed and to join forces to make sure that happens.