Water

Types of water entitlements

Rights and access to water are governed by a complex collection of regulations and laws that differ between Queensland and New South Wales. Some water entitlements are attached to land and are automatically transferred upon the sale of that land, such as water licences.

Others can be independently purchased and sold either separately or in conjunction with the sale of land, such as water allocations and water access licences.

These entitlements hold significant value and it is important to understand your rights and obligations in relation to their transfer and ensure that they are appropriately dealt with to protect your interests in any purchase, sale, or lease and in your estate or succession planning.

Associated authorities

Often a water entitlement will authorise the use of the water, but a separate works or development approval or water supply contract is required to actually take the water.  It is important to make sure you are receiving both if you purchase land benefited by a water entitlement.

Dealing with water entitlements

Owners of supplemented water allocations (where water is supplied from a dam) must have a supply contract with the resource operations licence (ROL) holder before they can take the water under that water allocation.  When transferring, or leasing, a supplemented water allocation, the purchaser, or lessee, must enter a supply contract with the ROL holder before settlement, or the water allocation transfer, or lease, cannot be registered.

Purchasers and lessees of an unsupplemented water allocation must obtain a dealing certificate from the relevant government department or the water allocation transfer or lease cannot be registered.

Some water allocations are supplied with water through infrastructure operated by the holder of a distributions operations licence (DOL).  There may be fees and charges and restrictions on transfers involved in dealing with these types of water allocations.

Some irrigation infrastructure operators may enter a contract for the supply of water to an irrigator under a channel harvesting diversion contract or other irrigation right, which effectively attaches to land.  It is important that this irrigation right is dealt with properly in the transfer of the associated land to make sure the purchaser obtains the full entitlement to the irrigation right.

It may even be possible for some irrigation rights to be transformed into a tradeable water entitlement, such as a water allocation or water access licence, under the Commonwealth Water Market Rules.

Structuring considerations

The ability to hold some water entitlements separately from land provides opportunities for asset protection, securing finance and greater flexibility in estate and succession planning.

Agreements

Often landholders share rights to water via water supply agreements or shared infrastructure arrangements.  We advise on many different types of water agreements including livestock bores, Category 2 Water Authorities and irrigation schemes.

It is possible for a Category 2 Water Authority to transform to another entity which provides greater control for land holders with less regulation.  We can assist in this process.

Experience

At Fox and Thomas, we pride ourselves on our extensive knowledge of the processes involved in the various dealings with water entitlements and we can help you appropriately address your water requirements and expectations through contracts and agreements.

To safeguard your assets and avoid time consuming, costly errors when transferring land and water entitlements contact the Fox and Thomas Property Law team today.