Arizona Water Rights Explained: What Every Land Buyer Needs to Know Before Purchasing Property

Imagine you found the perfect piece of land in Arizona.

It has great views and the price is just right for your budget. You’re ready to build your dream home and start your new life.

But then you find out you can’t dig a well or get water to your house. This happens more often than you’d think in the desert.

Water is more valuable than gold in Arizona because it’s so hard to find. If you don’t know the rules, you might buy land that you can never build on.

We’re going to explain the rules, so you don’t make a costly mistake. It’s not as scary as it sounds once you know what to look for.

Why Arizona Water Rights Matter for Your Land

Arizona is an arid place with numerous regulations governing water use.

The state must ensure there’s sufficient water for everyone to live here comfortably. Because of this, the rules change depending on exactly where the land sits.

In this section, we’ll talk about three terms you need to know. These terms will help you understand if your land has a future or if you should avoid it.

• Active Management Areas (AMAs): These are special zones in Arizona where the state tracks water very closely. If your land is in an AMA, there are much stricter rules about how much water you can use and how you can get it.
• Assured Water Supply: This is a legal promise that there’s enough water for a piece of land for at least 100 years. If a developer wants to build a neighborhood in an AMA, they must prove they have this supply before they can start.
• Exempt Wells: These are small wells used for homes or small gardens that pump less than 35 gallons per minute. They’re called exempt because they don’t need the same heavy permits that big farms or factories need.

Understanding the Arizona Active Management Areas and Your Land

Most people live in places called AMAs.

The biggest ones are around Phoenix, Tucson, and Prescott. In these locations, the state wants to ensure the groundwater isn’t pumped out too fast.

Land Within an AMA

If you’re buying land inside an AMA, you need to be very careful. You can’t just dig a well wherever you want and hope for the best.

You usually need a permit, and sometimes you can’t get one at all. This is because the state is trying to reach a goal called safe yield.

Safe yield means we don’t take out more water than goes back into the ground from rain. If the area is already using too much water, the state might stop new wells from being drilled.

Land Outside an AMA

Buying land outside of an AMA is a bit different.

The rules are much looser in the rural parts of the state. These areas follow something called the Reasonable Use Doctrine.

This doctrine says you can pump as much water as you need as long as you use it for a good reason. It also says you shouldn’t waste the water or hurt your neighbors.

However, “reasonable” can be a hard word to define in court. If a neighbor thinks you’re taking their water, you could end up in a big legal fight.

The Arizona 100-Year Assured Water Supply Requirement

This rule is the most important one for anyone buying land to build a house.

The state wants to make sure that if a house is built, it won’t run out of water in ten years. In fact, if you’re in an AMA, a developer must show they have a 100-year supply.

Your water supply must follow these requirements:

• This supply must be physically available under the ground or through a pipe.
• It also has to be legally yours so nobody else can take it.
• The water also has to be clean enough to drink safely.
• Finally, the developer must have the money to keep the water flowing for a century.

If you buy a lot in a subdivision that doesn’t have this, you might not get a building permit. You’d be stuck with land that’s worth much less than you paid.

Outside of AMAs, some counties have adopted similar rules. They call them mandatory adequacy rules.

To sum up: Always check with the county planning office before you sign papers. They can tell you if the land has a proven water source.

Different Types of Arizona Groundwater Grandfathered Rights

Sometimes land comes with special water rights because of its history.

These are called Grandfathered Rights. They’re based on how the land was used in 1980 when the big water laws were passed.

There are three main types you should know. These can add value to your land if you have them.

1. Irrigation Grandfathered Rights: These belong to land that was farmed between 1975 and 1980. You can only use this water to grow crops on that specific piece of land.
2. Type 1 Non-Irrigation Rights: These happen when someone stops farming and wants to use the water for something else. This could be for a golf course or an industrial building.
3. Type 2 Non-Irrigation Rights: These are the most flexible because they aren’t tied to a specific piece of land. You can sell these rights to someone else or move them to a different property.
4. Surface Water Rights: These are rights to water from rivers or streams, and they’re separate from groundwater. In Arizona, the rule for rivers is first in time, first in right.

Exempt Wells versus Non-Exempt Wells in Arizona

Most single-family homes in rural areas use wells. If you’re just building one house, you’ll probably want an Exempt Well.

What are Exempt Wells?

Exempt wells are great because they’re easier to get approved.

You don’t need to prove a 100-year supply for a single exempt well. But you still have to follow rules about how far the well is from your septic tank.

What is a Non-Exempt Well?

On the other hand, non-exempt wells are for places that use a lot of water, like vast farmland, mines, or huge housing projects.

These wells need special permits and constant reporting. You have to tell the state exactly how much water you pump every year.

If you buy land and plan to start a big business, you’ll need to check if you can even get a non-exempt permit. In many parts of Arizona, it’s getting very hard to get new ones.

How Water Rights Affect Arizona Property Values

Water is the most important part of a land’s value in the desert.

If a piece of land has a proven water source, it’s worth more money. If it doesn’t, it might only be good for parking a trailer or looking at the stars.

You might see two lots right next to each other with very different prices. One might have a shared well agreement, while the other has nothing. The one with the water will always sell faster and for more cash.

How to Increase Your Property’s Value

As a seller, you should have all your water documents ready for buyers.

If you’re a buyer, don’t just take the seller’s word for it. You should hire a professional to check the well or the water rights.

A water right is a legal interest that’s just as important as the deed to the land. If the water right isn’t clear, the title to your land isn’t really clear either.

Case Study: The Miller Family’s 5-Acre Parcel

Let’s look at a real example of how Arizona water rights work.

The Miller family wanted to buy five acres in Pinal County to build a small ranch. Pinal County is inside an AMA, so the rules are very strict.

They found a beautiful lot and wanted to make sure they could get water. They followed a specific timeline to protect their money.

The Millers found out the land didn’t have a well yet.

However, they saw that the neighbors all had working wells nearby. They also checked with the Arizona Department of Water Resources (ADWR).

The ADWR told them they could get a permit for an exempt well. They learned the water was about 800 feet underground.

Knowing it would cost $65,000 to drill made them feel better. They knew the total cost of their home before they even started.

If they hadn’t checked, they might have found out later that the water was 1,200 feet deep. That would have cost them significantly more.

Steps to Take Before You Buy Arizona Land

You should always do your homework before you buy.

The first thing you should do is find out if the land is in an AMA. You can find maps online that show the boundaries clearly.

If it’s in an AMA, ask the seller for a Certificate of Assured Water Supply. This is the gold standard for water security.

If the land is outside an AMA, check if there’s an existing well. You’ll want to see a well log, which is a record of how the well was built.

It tells you how deep the well is and how much water it produces. You should also have the water tested for things like arsenic or lead.

Arizona water is often very hard and can have natural minerals that aren’t good to drink. Fixing problems like this can be expensive, so you want to know about them early.

More issues to consider:

• Look for the well registration number (it usually starts with 55-).
• Check the “depth to water” in the area using state records.
• Ask neighbors about their water quality and if their wells ever go dry.
• Make sure any shared well agreements are recorded with the county.

Let’s Talk About Your Arizona Land

Selling or buying land with water issues can feel like a big mess.

But it doesn’t have to be that way if you have the right help. We’ve seen all kinds of water problems and we know how to handle them.

If you have land in Arizona and you’re worried about the water rights, give us a call. We’re happy to chat and help you figure out what your land is worth.

We buy land for cash, and we can close in as little as 30 to 60 days. You won’t have to worry about long delays or complicated paperwork.

We’ll take care of the hard stuff so you can move on to your next adventure.