Understanding Decreed Water Rights, Water Shares, and Contractual Entitlements in Colorado

Introduction

The purpose of this document is to assist those interested in understanding water rights associated with property and real estate, but not directly involved in water law, distribution, or administration in Colorado. It explains the legal structures and authorized entities responsible for distributing water, outlines how these arrangements define the amount available to landowners, and highlights key concerns for typical landowners during transactions involving Colorado water rights. Lastly, it provides readers with enough legal context and terminology to communicate effectively with an attorney, so they can identify the real issues before spending time and money on legal fees. 

Water Rights and Use in Colorado 

Colorado water law is based on the Colorado Constitution, statues including the Water Right Determination and Administration Act of 1969 (C.R.S. § 37-92-101 et seq.) and court decrees [1,2]. The historical evolution of these laws and their administration over the state’s first century traces how appropriation principles and water administration matured from early territorial practices into the modern adjudication framework [3]. The Constitution provides that water in the state is the property of the public. 

However, most residents do not own or control water rights. A water right is a personal property right with limitations. Water rights are usufructuary rights, meaning they grant the right to use water, not to possess or own it outright, and they do not override property boundaries, meaning a person cannot cross private land, tamper with headgates, or physically access a stream without an access arrangement, even if they legally hold a water right.  There are currently more than 150,000 decreed water rights in Colorado, held by farmers, municipalities, industrial facilities, and other water users [4]. 

These legal principles did not develop in isolation; they were responses to the physical limits of the West. As Wallace Stegner wrote, “the inflexible fact of aridity lay like a fence along the 100th meridian,” [5] a reminder that law and administration evolved under the constant pressure of scarce water. 

The Constitution adopts the doctrine of prior appropriation, under which the water user who first puts water to beneficial use has the senior right to obtain water in shortage conditions. A water right does not guarantee access to water. Water rights may only be exercised when they are in priority. In other words, it must have a senior enough priority date to divert water based on the available supply and the competing demands of other users.  The older the priority date, the better chance of receiving water in shortages. 

In Colorado a water right authorizes the diversion of water for a legally recognized beneficial use [6]. Colorado law defines beneficial use broadly, encompassing activities such as agriculture, mining, municipal supply, manufacturing, environmental protection, and recreation.  Uses and diversions must be reasonable and appropriate under efficient practices, without waste.  Individuals and entities owning water rights may privately construct diversion facilities on the lands of others to withdraw, transport, or store water from a stream or aquifer. 

Colorado uses a system of specialized water courts to adjudicate water rights, establishing by decree the priority date, lawful beneficial uses, and limitations such as location, timing, and quantity of water use [7]. Water rights may be changed or transferred to a different location or type of beneficial use, subject to court approval to ensure no injury to other water users. 

Understanding the water decrees that apply to a property is essential for both practical management and legal protection.  Imprecise, incorrect, or incomplete language in transactions involving water rights is a common source of litigation in Colorado. 

Colorado landowners primarily use water in ways that remove it permanently from the hydrologic system, a physical process called consumptive use (CU). Examples include agricultural irrigation, municipal supply, and industrial applications such as mining, snowmaking, power generation, and food processing. When a water right is changed, such as its type, place, or point of diversion, the historical CU defines the legally recognized extent of that right. Determining historical CU typically involves a licensed water resources engineer analyzing crop history, irrigation records, climate data, and diversion records, with results often presented as expert testimony in water court. By law, quantification must be based on actual historical use for decreed purposes over a representative study period that includes wet, dry, and average years (§CRS 37-92-305). 

Water rights and access can be complex, and misunderstandings are common. In some cases, buyers believe they have secured water rights, only to later discover that the water has been sold or is otherwise unavailable. Similarly, sellers may mistakenly assume that water rights are included with the property, not realizing they have been previously transferred. 

The bottom line: buyers should never assume that water comes with a property. Because water rights may have been sold, leased, or restricted, it is essential to verify water availability with the entity responsible for delivery, such as a ditch company, irrigation district, or water provider. Before purchasing, buyers should review decreed rights, well permits, ditch shares, and related agreements to avoid costly misunderstandings.

Types of Water Rights

The Colorado water rights system plays a significant role in shaping the responsibilities and opportunities of landowners who own or control real estate within the boundaries of water management entities [8]. Real estate advertisements or deeds, for instance, often describe parcels as having water rights associated with the land. For those interested in purchasing land with these benefits, questions typically arise as to: 1) who manages the water, 2) how much water is typically available from the ditch or canal that serves the property, 3) what is the availability in a dry year to the property, 4) are there ditch fees or operational costs associated with the water, 5) how the water may be used, and 6) what price is charged for the water depending on the location and organizational structure. 

Understanding the potential water supply for a property in Colorado requires familiarity with the primary legal instruments that govern it: decreed water rights, water shares, and contractual entitlements. It is critical to recognize that landowners often do not own water rights but instead hold a legally recognized right to receive water, based on the rules of the entity responsible for distribution. 

In Colorado, a water right is considered a legal entitlement, formally recognized by the water court as a decreed water right. Such a decree specifies the source, amount, priority, point of diversion, and type of use. The two primary types of decreed water rights in Colorado are surface (direct flow) rights and storage rights. Being decreed makes the water right enforceable against other users under the doctrine of prior appropriation. Groundwater may also be subject to decrees if it is tributary to surface streams. 

Surface Water Rights

Surface or direct flow rights refer to water that is diverted from a river or stream into a ditch, canal, or pipeline for immediate use. Once diverted, the water is typically conveyed through lateral ditches or pipelines to reach its place of use. These rights are measured by flow rate, usually expressed in cubic feet per second (cfs), though some rights also include an annual volume limitation measured in acre-feet (ac-ft), the amount of water it takes to cover an acre of land one foot deep, about 325,851 gallons in everyday terms. For example, a direct flow right of 2.0 cfs entitles the holder to divert water up to this rate when the right is in priority but does not guarantee a continuous supply.   Not all diverted water is consumed; some flows back to streams and ditches as return flows, and under limited conditions may form the basis of a water right. 

A curious remnant of pioneer-era water history is the use of miner’s inches to quantify flow, a unit still embedded in some ditch company shares, though many landowners may not recognize the term [9,10]. A Colorado miner’s inch is defined as 1.56 cubic feet per minute, about 1⁄38 cfs, or 11.69 gallons per minute [11]. This unit was originally quantified using simple wooden boxes with small openings to measure and regulate flow before modern devices existed [12]. As flow measurement became more precise, the miner’s inch was converted so that 38.4 miner’s inches equated to the more conventional value of 1 cfs, allowing this older but legally entrenched unit to be preserved in modern administration. In everyday farmer-speak talk, one hears that 1⁄38 cfs is about the amount flowing through a ¾″ siphon tube with a “mild bend” bend set at a typical drop [13]. 

Beyond the units of measurement, Colorado law also distinguishes between native flow and transbasin water rights. Native flow rights divert and use water within the same river basin, and once the water returns to the stream system, it is available to downstream users. In contrast, transbasin rights import water from one basin to another; because this water originated outside the natural watershed, holders in some cases can reuse it to extinction, provided they can track and control its use. But to be clear there are also notable examples, such as Denver’s 1940 agreement with South Platte irrigators, where contractual limits prevent imported water from being reused to extinction, requiring that return flows remain available to downstream users.

Storage Water Rights 

Storage rights refer to the legal authorization to impound and store water in a reservoir or pond for later application to a beneficial use. These rights are measured in units of volume, typically acre-feet (ac-ft), which represents the amount of water that can be legally stored. For example, a storage right of 100 ac-ft entitles the holder to store up to 100 ac-ft of water in a designated reservoir, subject to the terms of its decree. In some circumstances, a formal storage right may not be required, provided the pond’s use is shown not to cause injury to senior rights. An example of this situation would be the operation of “regulation” ponds with turnover periods of 72 hours or less, or livestock/stock-watering ponds that do not intercept groundwater or impair downstream priorities. 

In Colorado, the largest storage rights are typically held by major municipal providers, federal projects, and water conservancy districts. Entities such as Denver Water, the Bureau of Reclamation (operating reservoirs like Blue Mesa and Flaming Gorge), and conservancy districts including Northern Water (Colorado–Big Thompson Project), the Southeastern Colorado Water Conservancy District (Fryingpan–Arkansas Project), and the Dolores Water Conservancy District collectively hold significant volumes of storage. These rights allow them to manage water across municipal, agricultural, industrial, and environmental sectors.

Groundwater Rights

Groundwater rights are obtained by the property owner by permit through the Office of the State Engineer under the Colorado Division of Water Resources (DWR). Groundwater from wells in the tributary to a stream should obtain a water court decree and are administered in priority with the surface flow rights. Low-flowing wells (less than 15 gallons per minute) are exempt from permit requirements. Water from those wells may be used only for in-house domestic use and to provide water for livestock. In some areas, groundwater use is also subject to additional oversight by groundwater management or conservation districts, which regulate pumping to ensure compliance with compacts, sustainability efforts, or regional policies. 

While water rights are decreed through Colorado’s water courts, the Colorado Water Conservation Board (CWCB) plays a complementary role by developing statewide water policy, funding water projects, and managing certain non-consumptive water rights. These include instream flow rights, held exclusively by the CWCB under state law to protect environmental and recreational values, and recreational in-channel diversions (RICDs), which are owned by municipalities, counties, or special districts but require CWCB approval.  

Non-consumptive rights are generally less relevant to most private landowners, but there are notable exceptions. Many landowners with decreed water rights have voluntarily assisted efforts to increase instream flows, for example, by fallowing land for a season and temporarily dedicating the associated water to instream use. One innovative project on the Little Cimarron River and McKinley Ditch [14] created the state’s first permanent dual-use water right in the state, legally structured to allow early-season irrigation followed by late-season instream flow. This split-season approach preserves agricultural production while restoring flows to a previously dewatered stretch of river, offering a promising model for private landowners seeking to balance productive use with ecological stewardship. 

Water Distributing Entities 

Collectively, a mosaic of legal arrangements and entities governs the administration of water under Colorado law. This complexity is especially relevant in land transactions, yet it often goes unrecognized by buyers unfamiliar with the system. Different administrative structures, boards of directors, legal philosophies, and problem-solving approaches all intersect, creating a framework intended to balance local priorities with citizen needs.

The result is governance that is anything but straightforward. For this reason, anyone purchasing land in Colorado, particularly when water is expected to be included or has been represented as part of the sale, must determine whether the property carries its own decreed water right or depends on an entity that manages and distributes the supply. In many cases, landowners do not hold water rights directly; rather, their access is mediated through a municipality, conservancy district, irrigation company, irrigation district, or water users association [15].   

This distinction is critical because owning a decreed water right grants direct legal authority to divert, store, and use water, subject only to constraints such as priority, beneficial use, and anti-waste provisions. Many landowners, however, receive water only through an entity that owns and manages the decreed rights, which means they have no direct control over diversion or delivery and must instead comply with the entity’s rules, allocations, and schedules.  

Such arrangements between landowners and the managing entity take the form of owning shares or contracts. Commercial ditch companies, once more common in the early development of irrigation in the West, retain ownership of the decreed water right and sell or lease water as a commodity under contract, but their role has diminished over time as mutual companies and districts became the dominant models [16]. 

Colorado has more than 200 entities that own and operate canals, ditches, and reservoirs for conveying decreed water rights. Under mutual ditch and reservoir companies, shareholders have an equity interest, offering proportional ownership in the company that holds the decreed rights. The equity stake does not grant ownership of a water right, but it entitles the shareholder to a proportion of the supply managed by the company. Access is tied to the number of shares held and all shares have the same priority date and deliveries remain subject to company governance, water availability, and collective scheduling (often rotational). Deliveries are overseen by ditch riders, who patrol canals, operate headgates, and ensure water is distributed according to company rules and decrees. 

One of the better-known mutual ditch companies in Colorado is the Farmers Reservoir and Irrigation Company (FRICO), incorporated in 1902, which manages canals and reservoirs to supply water for both agriculture and municipal needs, serving about 8,000 shareholders and roughly 300,000 residents in the northwest Denver area. Another example, the Grand Valley Water Users Association (GVWUA), organized in 1905 is a private, non-profit corporation that manages the Grand Valley Project, including the Government Highline Canal, Colorado River Roller Dam, and related infrastructure, to deliver irrigation water across thousands of acres in Mesa County. 

Lateral ditch companies also exist, but unlike mutual ditch companies, they do not hold water rights. Instead, they maintain and operate ditch laterals that convey water from larger supply systems to individual users. 

Beyond corporate and district-based models, acequias illustrate how water ownership and governance can be historically rooted and legally distinctive. The San Luis People’s Ditch, supplied by Culebra Creek, is a celebrated example that highlights the institutional diversity of these arrangements. It holds Colorado’s oldest adjudicated irrigation right, dating to April 1852, and continues to deliver water to about 1,600 acres through an acequia system still in operation today. Unlike a company or district, the ditch is a communal asset collectively owned and managed by its users, known as parciantes. Farmers on acequias hold individually decreed surface water rights tied directly to the land and its historical beneficial use. This acequia tradition, predating Colorado’s statehood, remains a distinctive and enduring water-sharing system unique to the region. 

Reservoir companies form another important category of distributing entities, with more than 50 operating across Colorado to manage storage for water users. For example, the Twin Lakes Reservoir and Canal Company, incorporated in 1935, oversees the Independence Pass Transmountain Diversion System that moves water from the Roaring Fork to the Arkansas River basin. The company’s primary role is to deliver water to its shareholders, but transactions can also occur at the shareholder level, where cities and other holders of Twin Lakes shares may lease or transfer their entitlements under Colorado’s system of transferable water rights. 

Alongside ditch and reservoir companies, Colorado also has many irrigation and water conservancy districts (to be discussed in more detail later). In addition to their local and regional responsibilities, these entities provide a cooperative framework for farmers and landowners to coordinate with state and federal law, ensuring that deliveries comply with water rights decrees and interstate compacts. They also give water rights holders collective bargaining power that individual irrigators would not have on their own. 

Given their scale and importance, most conservancy districts are devoted primarily to water distribution, but some take on broader roles such as protecting existing rights, funding projects, or managing compact compliance. For example, the Lower Arkansas Valley Water Conservancy District emphasizes water quality, conservation, and local infrastructure. 

Building on this framework, Colorado also has four separate water conservation districts, a different type of entity often confused with conservancy districts because of the similar name. Unlike conservancy districts, conservation districts do not administer water tied to parcels. Instead, they were created by the legislature to focus on long-term planning, compact compliance, and large-scale projects. These include the Southwestern Water Conservation District, the Rio Grande Water Conservation District, and the Republican River Water Conservation District. One of the most well-known among the public, the Colorado River Water Conservation District, plays a central role in protecting Colorado’s share of the Colorado River, funding and supporting local water projects, and ensuring supplies for Western Slope farms, communities, and the environment.

Water Shares

Water shares are among the most common legal arrangements for distributing water in Colorado and also represent the state’s oldest organized system of water delivery. Shares represent an ownership interest in a mutual ditch, canal, or reservoir company, or in a water users association. Owning a water share makes you a part-owner of the company that holds the decreed rights, but it does not grant ownership of the water right itself. Instead, a share represents a proportional entitlement to receive deliveries managed by the entity, with the actual flow varying each year depending on snowpack, storage, and operating policies.

Because shares provide a proportional interest rather than a fixed volume, deliveries may be reduced in dry years or eliminated altogether in severe droughts. These nonprofit community enterprises acquire direct-flow or storage rights, maintain the infrastructure needed for conveyance, and deliver water for the beneficial use of their shareholders [16,17]. Assessments collected from shareholders fund these operations, and additional details on ditch governance are provided in CSU Fact Sheet 6.701 [18]. 

In practice, water shares function much like stock certificates, documenting a proportional claim to water owned or controlled by the company. The underlying rights and their priority dates are appropriated to the ditch, canal, or reservoir system. Each company’s share structure determines allocations, which are generally measured in cfs or ac-ft. Allocations fluctuate annually with supply, but all water deliveries remain subject to the requirement of beneficial use. In Colorado water management, the term allocation is used to describe the annual or seasonal amount that water each share, contract, or unit will provide. Allocations are the practical mechanism that translate paper entitlements into the actual volumes delivered to landowners. 

Shares may be sold, leased, or transferred like other forms of property, though all transactions remain subject to Colorado’s anti-speculation doctrine and the principle of beneficial use. Transfers that involve a change in type, place, or timing of use must undergo water court review to ensure that no injury occurs to other users. These requirements, along with the risk of abandonment, directly influence how water shares are valued, maintained, and transferred [19]. 

Senior ditch shares are highly sought after by municipal and industrial users seeking secure long-term supplies. Still, traditional injury concerns can restrict transferability, particularly when transfers affect other shareholders [20]. Some shares are permanently tied to land through conservation easements or association rules, underscoring the need to confirm transferability before any transaction.

Contractual Entitlements

Mutual ditch companies proved effective for small groups of farmers who pooled resources to build and operate local ditches, with shareholders holding a direct stake in the decreed water right. By the early 20th century, however, Colorado was developing large federally and district-financed storage and delivery projects too big, complex, and costly to be managed as small shareholder corporations. The Bureau of Reclamation, founded in 1902 with the passage of the Reclamation Act, became the federal agency responsible for developing and overseeing large water projects in the West.

In Colorado, Reclamation undertook construction of several major projects [21], and with them emerged the concept of project water, referring to supplies delivered under federal systems but distributed through local operating partners. These projects rarely stand alone; rather, they are administered by quasi-public entities created under state law to manage decreed rights and coordinate water deliveries within large service areas. In federal projects, the United States retains legal title to the decreed rights and physical infrastructure, while irrigators and municipalities are treated as beneficial owners through their contracts [22].  

This new scale required different administrative tools, and the distributing entities developed a system of land-based contractual entitlements, or simply, contracts. This type of arrangement gives distribution entities a structured approach for distributing project water in Colorado. Contracts ensure water is delivered fairly through shared infrastructure, allocated in a clear manner during drought, and allow for centralized oversight so deliveries comply with state law.

Contracts are distinctly different from water shares, for a number of reasons, though the two are still often confused. Put simply: water shares are an equity interest in a company’s decreed right, whereas users of project water hold only a long-term contractual entitlement administered by the district or quasi-public entity [14]. Each year, a governing board sets the annual allocation (often expressed as a quota or percentage), which is then applied to each contract or unit. The actual delivery is calculated by multiplying the entitlement by that year’s allocation percentage, ensuring that all users share proportionally in surplus or shortage. 

Another key feature of water contracts is how they define the connection between land and transferability. In some districts, contracts are attached to specific parcels and transfer with the land during sale, while in others the contract establishes allotments that exist independently of land ownership and can be bought, sold, or leased subject to board approval. In many projects, contractual entitlements are linked to irrigated acreage within project boundaries, so deliveries are apportioned according to the number of acres served rather than as abstract ownership shares. Unlike mutual ditch company shares, which give individual shareholders a proportional ownership interest in the decreed right, contracts keep ownership centralized at the district level. Because policies vary by association and district, landowners must review local rules carefully rather than assume a contract can be freely reassigned or severed from property. 

Although the Bureau of Reclamation frequently owns the major works like dams, reservoirs, and canals, the day-to-day administration of deliveries is delegated to local entities such as conservancy districts, irrigation districts, or water users associations under operating contracts. Numerous types of water distribution entities exist in Colorado for the purpose of managing contractual entitlements to water, each operating under governance frameworks established in statute (§ 37-45-101 et seq.). These quasi-public entities hold decreed rights, finance and maintain large storage and delivery systems, and ensure that project water is distributed equitably among agricultural, municipal, and industrial users. While the work of districts and the concept of project water often overlap, since many districts are the operating partners for large projects, they are not universal to one another.  

Irrigation districts, first authorized under the Irrigation District Act of 1905 (C.R.S. 37-41), are landowner-initiated organizations that finance, construct, and operate irrigation delivery systems primarily for agriculture. By statute, they function as land-based systems: the district owns and manages the decreed water rights, while delivery entitlements are appurtenant to lands within its service boundaries.

Colorado law makes this explicit: “The right to the use of water acquired under the provisions of this article shall become appurtenant to the land for the irrigation of which said water was acquired, and such right shall never be sold, assigned, or transferred separately from the land …” (C.R.S. 37-41-138). In practice, this means the right to receive irrigation water is tied directly to the parcel rather than owned by the individual, and when the land is sold the entitlement to service typically transfers automatically with it, unless formally severed by district action, which is a rare occurrence. 

Some of the earliest districts, such as North Sterling (1907) and San Luis Valley (1908), have been in operation for more than a century. Their ability to pool resources and store water transformed semi-arid regions into productive farmland and provided a safeguard during droughts, often making the difference between a successful harvest and economic collapse. Today, irrigation districts remain vital to rural Colorado by ensuring continuity of water delivery across generations of landowners, reinforcing the stability of the land-based framework envisioned in the 1905 statute. 

Water users associations function much like irrigation districts in that water service is appurtenant to the land, but they arise under a different legal framework. Unlike irrigation districts, created under Colorado statute, these associations are typically organized as nonprofit corporations under state corporate law to contract with the Bureau of Reclamation. Their authority to deliver water stems from federal Reclamation contracts rather than a specific state statute. Within this structure, irrigators and landowners hold contract entitlements defining their right to receive deliveries. 

Similar to irrigation districts, the contract entitlements under the association are generally tied to specific parcels of land. When property in the service area is sold, the entitlement to receive water typically transfers automatically with the parcel, preserving continuity of irrigation service. This hybrid arrangement maintains the land-based character of delivery while layering in the federal contractual framework distinguishing a water users association from a state-created district. 

The Uncompahgre Project, for instance, developed by Reclamation, diverts water from the Gunnison River through the Gunnison Tunnel to irrigate lands in the Uncompahgre Valley. The Uncompahgre Valley Water Users Association (UVWUA) manages these allocations, which remain tied to the land and cannot be transferred independently. This structure ensures project water stays dedicated to agriculture in the valley but requires careful review during land transactions. Importantly, not all allocations are equal: historical land classifications created differences in reliability and delivery, making the UVWUA a clear example of how geography and class distinctions shape water access. 

Conservancy districts, created under the Water Conservancy Act of 1937 (C.R.S. 37-45), are large quasi-public entities designed to take on broader water management responsibilities. While irrigation districts and water users associations focus on delivering water for agriculture, conservancy districts are empowered to oversee multi-purpose projects serving farms, cities, industries, and environmental needs [23]. The statute allows local groups of landowners, counties, or municipalities to petition state water court to establish a conservancy district for developing, operating, or protecting water supplies. Within this framework, districts may administer contracts functioning as entitlements (though terminology varies), lease water, operate reservoirs, and maintain major infrastructure to deliver water to a wide range of users. Importantly, the name conservancy district reflects the legal authority under which they were organized, not a uniform function. Some districts concentrate on agriculture, others on municipal or domestic service, and still others on planning, compact compliance, or infrastructure financing, illustrating the flexibility of this statutory model. 

Examples across Colorado illustrate how conservancy districts use contracts to manage project water. In the Arkansas Basin, the Southeastern Colorado Water Conservancy District (SECWCD), formed in 1958, administers the Fryingpan–Arkansas Project, which imports Western Slope water to support farms, cities, and industries across a nine-county area. The project is funded through a mill levy on property valuations within the district. Those who use the water hold contracts defining their entitlement, while the district retains ownership of the decreed rights. Each year, the board sets allocations based on reservoir conditions and project yields, so deliveries may be full in wet years or reduced during drought [24]. 

Farther west, the Dolores Water Conservancy District (DWCD), organized in 1961, manages the Dolores Project, with McPhee Reservoir at its center. Irrigators, municipalities, and the Ute Mountain Ute Tribe receive water through long-term allotment contracts, which secure entitlements but not underlying rights. These contracts are not tied to parcels of land; instead, they define a proportional share of project supplies adjusted annually. Deliveries fluctuate with hydrologic conditions, ensuring wet years bring abundant supplies while dry years impose proportional reductions. 

In the South Platte Basin, the Central Colorado Water Conservancy District (CCWCD) was established in 1965 to address groundwater pumping. The district holds and administers decreed rights, distributing them through allotment contracts with irrigators and landowners. Each contract specifies a proportional share of the annual supply, so while holders have a right to receive water, they do not own the rights. In shortage, reductions are shared across allotment holders, spreading the burden evenly while sustaining the collective system. 

The Northern Colorado Water Conservancy District (Northern Water), created in 1937, administers the Colorado–Big Thompson (C-BT) Project, one of several transmountain diversions in the West. Built by the Bureau of Reclamation and operated in partnership with Northern Water, the Project moves Colorado River water through a complex system of reservoirs, tunnels, and canals to supplement supplies in the South Platte Basin.

Pursuant to the water conservancy district statute, Northern Water delivers through a unit-based system of allotment contracts that are not tied to land ownership. Each unit represents a contractual entitlement rather than a fixed volume of water. Northern Water’s board sets an annual quota, expressed as a percentage of an acre-foot, which determines how much water a unit yields in a given year. Allotment contract holders do not own the decreed water rights themselves but instead hold units that can be bought and sold with board approval of the transfer, making C-BT water flexible compared to the parcel-based contracts common elsewhere in Colorado. The temporary or permanent transfer of C-BT units is subject to applicable rules and contracts, and those interested should contact Northern Water for information on the requirements and process. 

In addition to the contractual frameworks described above, Colorado’s water landscape also includes federally reserved tribal water rights established under the Winters Doctrine of 1908. These rights recognize the federal government’s obligation to secure sufficient water to fulfill the purposes of Native American reservations and therefore often predate most state-based appropriations.

Within Colorado, the Southern Ute Indian Tribe and the Ute Mountain Ute Tribe hold quantified water settlements that define their legal entitlements while integrating them into regional water management frameworks. These rights are administered in cooperation with the Bureau of Reclamation, the Colorado Division of Water Resources, and entities such as the Dolores Water Conservancy District. The resulting arrangements preserve the sovereign status of tribal water rights while ensuring their coordinated inclusion in the operation of major federal and district water projects [25].

Understanding Water Availability for Land Use

When planning land use activities, it is essential for landowners to understand how much water is actually available when their water right is in priority. A decree may specify a flow rate, but the true measure of irrigation potential lies in the total volume deliverable over a season that can be applied to CU. Misjudging this volume will result in unrealistic expectations about crop viability and increase the risk of shortages for agricultural and landscape uses. 

For farming and horticulture, it is helpful to think about water availability across the growing season (typically April–November). Calculating seasonal volume, rather than relying solely on flow rate, enables more informed decisions about crop selection and irrigation planning. Although most landowners do not perform these calculations, support is available through NRCS field offices, CSU Agricultural Experiment Station and Extension programs, and local water delivery entities, all of which can help translate flow rates into usable volumes for specific parcels. By recognizing these limits, landowners can avoid overestimating supply and promote more sustainable water use. 

Understanding CU is important to knowing the value of a water right. This determination often requires a qualified engineer or lawyer. At its core, the issue is the difference between available water volume per share and historical beneficial CU per share. A Historical beneficial CU per share is typically quantified in water-court change cases, where engineers and attorneys present records of actual crop irrigation, ditch deliveries, and return flows over decades of use. These proceedings establish legally recognized CU values, which may differ substantially from the nominal allocation. As a result, the market value of a water share is often determined less by its stated volume than by the CU historically applied. 

Assigning a market value to water shares or contractual entitlements is highly complex and beyond the scope of this document, but extensive scholarship has examined how market-based instruments can improve the allocation and valuation of water resources [26]. Guidance on the appraisal of water rights in Colorado is elaborated upon in more comprehensive resources for further reading [16]. 

Water Rights and Land Records

The Colorado Division of Water Resources (DWR), through the State Engineer and the Division Engineers in the seven major river basins, administers water according to the terms of decrees, the priority system, and hydrologic conditions.  The Colorado DWR has developed an online database, DWR Water Right Net Amounts, which identifies the net amounts available to water rights. It is currently available on Colorado’s Open Data Portal (verified December 12, 2025). 

https://data.colorado.gov/Water/DWR-Water-Right-Net-Amounts/acsg-f33s/data

This does not mean, however, that a statewide ownership registry exists for water rights as they pertain to individual parcels of land and real estate.  In some cases, recorded documents at the county clerk office may help reveal chain of title or conditions of use, but water rights allocation histories are best found in the internal records of the water delivery entity. Questions regarding available water or the validity of water rights for property in Colorado can always be directed to the entity that allocates the water. 

In addition to the DWR Water Right Net Amounts database, buyers can also explore the Colorado Decision Support System (CDSS), which provides detailed information on water rights, diversion records, streamflows, and well permits. At the local level, county assessor and clerk and recorder offices may have deeds, plats, and recorded documents that reference water rights or ditch shares tied to a property. Finally, the most definitive information often resides with the ditch and reservoir companies or irrigation districts, themselves, which keep shareholder lists, bylaws, and records of delivery obligations that directly affect a parcel.

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*Note: Because water rights law is complex, this document uses qualifying terms such as ‘typically,’ ‘generally,’ or ‘most of the time’ to describe common situations, because many cases are unique and require confirmation.

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References

1. Jones, Alan, and Thomas Cech. 2009. Colorado Water Law for Non-Lawyers. Boulder, CO: University Press of Colorado. 
2. Trout, R. V., B. W. Rale, P. E. Montaño, J. S. Witwer, and D. L. Freeman. 2011. Acquiring, Using, and Protecting Water in Colorado. Denver, CO: Bradford Publishing Company. 
3. Radosevich, George E., Karl C. Nobe, David Allardice, and Charles Kirkwood. 1976. Evolution and Administration of Colorado Water Law, 1876–1976. Fort Collins, CO: Water Resources Publications. 
4. Colorado Legislative Council. 2018. State Water Policy: A Legislator’s Guide to Colorado Water Issues. Denver, CO: Colorado Legislative Council. 
5. Stegner, Wallace. 1954. Beyond the Hundredth Meridian: John Wesley Powell and the Second Opening of the West. Boston: Houghton Mifflin. 
6. Nichols, Peter D., Megan B. Brown, and Meg C. Preston. 2005. Water Rights Handbook for Colorado Conservation Professionals. Denver, CO: Bradford Publishing Company. 
7. Water Education Colorado. 2015. Citizen’s Guide to Colorado Water Law. 4th ed. Denver, CO: Water Education Colorado. 
8. Kinney, C. S. 1912. The Law of Irrigation and Water Rights. San Francisco, CA: Bender-Moss Company. 
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Acknowledgements

This document was reviewed by Retta Bruegger, Regional Specialist and Extension Faculty; Mark Hermundstad, Esq., Colorado West Land Trust; Kirsten M. Kurath, Esq., McDonough Law Group; Sabra Lin O’Crotty, United Country Real Colorado Properties; Amy Moyer, Colorado River Water Conservation District; and Bradley Wind, Northern Colorado Water Conservancy District.