Overview of Shared Water Wells
A shared water well agreement is a contract that delineates each property owner’s rights for shared water wells. It is relatively common for neighboring properties to have a water well in common (for example, the water runs through one pipe on each property through a Y joint), with each property owner having a fifty percent share in the water well. Shared water well agreements establish what each owner’s rights are with respect to the water well itself and with regard to the portions of the water lines located on the other property. In essence, the shared water well agreement sets forth what "happens if" . For example, what happens if (1) the well quits pumping water, is otherwise damaged or needs to be deepened; (2) if there is a water line leak, or the water line otherwise needs to be repaired; (3) if the amount of water used by one property owner is unreasonable to the other property owner; (4) if the parties cannot agree on what happens if an owner wants to sell his property; and (5) what happens if a new property owner buys the property?
A common use for shared water well agreements is when two properties are owned by the same family and the parent gives the older child one tract of land, with the intent that the older child will give the other child his portion of the land at some future time. The older child will then propose to the younger child to either enter into an agreement with the "new" property owner, or otherwise buy out the younger child’s fifty percent interest in the well and water lines. A shared water well agreement makes good sense in these situations, since the agreement only addresses certain rights, as opposed to the other common alternative of establishing a well solely on the property of one of the owners (largely due to cost). Each property owner has to pay half the cost of the well and also arranges for its maintenance.
Essential Components of a Water Well Agreement
The parties involved in a shared well
Of course, the parties to the well agreement will be defined as those who own the well and will be capable of demanding rights to water. The owner, though, doesn’t have to walk away with the most water rights. While parties could define the terms of their ownership, having a legal firm guide you through the process can help ensure you’re getting an agreement that works for you.
Responsibilities of maintenance
In general, the responsibilities of well maintenance boil down to two categories. The first concerns who will enforce the agreement and when. The second concerns the specific role that each party will play in maintenance procedures and repairs. At the very least, the document should mention the types of mechanical and electrical processes necessary for the well to operate, and the parties involved in those plans should be clearly defined.
Water fees
Typically, water fees are determined when there’s a water shortage. For example, if the water table drops, then the parties may need to charge each other for the water. The fees can vary but, more importantly, the contract should stipulate a process for fee determination made by a neutral party. Where states require permits for well usage, those rules may apply to shared wells as well.
Water usage
As mentioned before, a water availability agreement should outline the actions each party must take in case a party’s usage of water affects the others. If one party overuses water from a well and reduces the amount of water available to other parties, compensation may be expected from whoever used the water. Even in cases where all parties agree to use water for different purposes, the agreement should clearly establish the amount of water each party can expect to use when times are good and when the well is running low.
Legal Issues with Shared Water Wells
Although shared water wells can be a good alternative to having no water source at all, the creation of a shared water well agreement and establishment of a shared water well entity can have some legal ramifications that should be considered. Accordingly, the agreement being prepared should address whether or not the well will be in compliance with local ordinances or regulations and should consider the laws and rules related to water rights for those wells and requirements for maintenance of the well(s).
The agreement should also provide for dealing with disputes amongst participants that may involve real estate claims among the parties and may even involve lawsuits. If the well is also used for irrigation, the agreement should address issues related to damage to crops, loss of use, and enforcement.
Cost and Maintenance Issues
In most shared well agreements, the well is maintained by one person or entity, either the owner of the well, or a neighbor that uses the well. The costs of maintenance are typically divided in some manner between the owners of the well and the other users.
Common approaches to cost sharing include dividing the cost in proportion to the number of parties using the well and dividing the cost of maintenance in proportion to the amount of water each party anticipates using. Problems may arise when the usage of the well exceeds the capacity of the well, or when one party is unwilling or unable to pay its share of the maintenance costs. When the other parties make demands for payment and the recalcitrant party refuses, the issue can only be resolved by court order.
Disputes with Shared Wells
Generally, disputes over shared water wells arise over use of water, maintenance of the well itself and related facilities, and compensation. They are usually between owners of adjoining lands subject to a common well and owners of lands enjoying a right to use it expressly or impliedly incorporated into come prior or contemporaneous transaction.
Disputes over use and rights are commonly recognized. For example, the negligence of one user causing damage to another is recognized in Texas (Whittenburg v. State; Robinson v. Ieyoub). This is true even though the well user having the greater share of water usage is not exclusively liable for the entire damage caused by the negligence. See Texas Water Code, section 11.086(a). Nor is that user entitled to reimbursement by the others for their shares of the water used. But the user has no right to waste water due to lack of foresight and diligence. The matters of division or apportionment of the water removed for use by the one over the other require reduction to specific amounts factoring in the various use considerations and the overall well water supply and the economic impacts. These are left with uncertainty even in long term agreements and require study and confirmation by all parties in the future.
Disputes may involve the nature and extent of the obligation to contribute to the maintenance and repair of the well. While the parties may enjoy correlative rights based on the equality of their contributions, depending on the particular circumstances and abilities of the parties, the right to contribution may not be absolute, especially for improvement of the well. For example, a party having little water use may be denied the right to contribute to the cost of repairing and improving the well. In these cases of limited well use, the value of the contribution may not justify the required upkeep to maintain a separate supply to it.
Disputes between parties may involve the question of whether and under what conditions a party may assign its interest in the well to some third party. The right to assign an interest or a right to use it does not pass unless agreed on in advance. A party having a first priority to well use may even have a right to compel priority for use by agreement.
The allocation or apportionment of the cost of operating the well and the facilities around it needs to be agreed on and well documented to avoid future disputes. There may be disputes over the interpretation of well use documents , including disputes over the imposition of restrictions and conditions, the obligations to pay for use of the well, and over which party shall pay the expense of operation. Frequent out-of-pocket expenses or repairs may support the view that a single service is costly and cannot be divided. A forensic review of the agreements may be required.
Mediation is one available means of dispute resolution that is generally available and appealed to as a means of avoiding further loss and getting the matter behind you. There are legal and contractual preconditions to the use of mediation. These must be dealt with in advance to avoid waiving them or getting backed into a corner. For example, you should provide advance notice of participation required in the proceedings. Those who extend the invitation to the mediation must abide by their own terms of participation. Counsel should be present, no matter how convincing the contrary opinion is from the mediator. An agreement should be summary documented and signed immediately, if possible.
Legal actions beyond mediation are also available to re-assign use and decide disputes. Lawsuits serve to clarify and settle a matter completely for the parties. Tenants in common share in the use of the well and are entitled to recover the percentage entitled to the proceeds gained from the use of water. Where necessary to compel the apportionment or contribution to the expenses of the well, the Water Court may be petitioned. A party may seek the appointment of a watermaster to oversee the allocation of the water. Section 11.384. Sometimes the well parties will want to exclude a party from the use of the well when they get along poorly. This requires us to comply with the due process rights peculiar to real property interests. A party may want the well closed to all from time to time.
Disputes involving the lease of property with a shared water well are common aspects of the operations of the entire water well industry. Water wells located in counties on the Coastal Prairie receive heightened scrutiny and management by the Groundwater Conservation Districts in those areas. These focus more on the ultimate purpose of the water use rather than the parties involved. Subdividing interests of interest leads to regulatory action that can sap the well’s productivity and limit its expansion.
Pro and Con of Shared Wells
The advantages and disadvantages of a shared water well include the opportunity for savings on well and utility costs and the likelihood that the water quality will be preserved. Shared wells can also reduce environmental effects, including energy consumption and carbon emissions.
Sharing the costs of well installation and maintenance can yield considerable savings, especially for homesteaders that would otherwise be unable to afford access to a water source. Shared well agreements make it easier for multiple parties to find a reliable and affordable solution to their collective need for a water supply. By working together to pay for expensive well drilling equipment, parties can cut their individual financial burden. Shared wells also allow on-site water to be pumped more frequently, increasing the overall water availability for the parties involved.
In addition to saving money, a shared well can save countless hours of time. The parties to a shared well agreement are able to carry out their obligations without needing to wait on a single party to act. This results in less waiting time and more available water.
Another advantage of a shared well is that the parties involved share the risk if the well fails. Since options are limited in many rural areas, agreeing to a shared well can help avoid water access problems later on. In particular, if one or more of the parties is unfamiliar with the risks of well ownership, a shared well can ensure that adequate knowledge is available to all parties.
In some cases, the parties sharing a well may not be located near each other, and therefore may not have opportunities to interact. The potential conflict that can come from poorly communicated ideas and goals does not disappear with a shared well. In a disagreement, each party often ends up backing their own ideas and initiatives exclusively, as opposed to working together toward a mutually acceptable result. This may be exacerbated when one party stands to gain the most from the shared well agreement.
The need for a shared well agreement grows out of necessity to resolve the issue of water supply. A reasonably sized agricultural business may require access to a large amount of water, while a family home needs only enough for daily use. The arrangement may be financially beneficial for a smaller operation that lacks the resources to drill their own well, but larger parties may find the deal undesirable.
Related to the above point, some parties may prefer private ownership of a well. Having sole access means less hassle if the well fails or needs additional work to bring it up to proper functioning. It may also mean that the individual may install changes that the other parties do not agree to, resulting in favorable conditions or equipment for that party. If a single party controls a well, their ability to work on it can be unrestricted by other views on how the water source should be used in practice.
How to Prepare a Shared Water Well Agreement
When it comes to drafting a shared water well agreement, there are some key factors to keep in mind. First and foremost, who is going to be responsible for the actual construction of the well? This is largely up to the property owners involved but you may also have the well drilling company handle this for you. Keep in mind that certain well drilling companies will only work on certain well types. If you want to use a surface well, you’re going to want to know ahead of time whether or not the company you’re hiring works on surface wells and vice versa.
Are the neighboring properties properly deeded to share the water well? This is something that you will want to determine in advance of sharing the well, as sharing the well could open you up to some liability exposure if not structured properly.
What are the maintenance requirements going to be? If you go into an agreement to share a well with a neighboring property, you will need to keep up on maintenance requirements . For example, the well may need to be disinfected occasionally, so plan for that in advance.
Thus far, it’s easy to see that the path to sharing a well isn’t quite as easy as you may have originally imagined. Other considerations include whether or not you will allow guests on your well (for example, if you own a vacation property) or whether or not you will allow the well to be used for commercial purposes, etc.
These types of agreements are structured on a case-by-case basis and may be more or less complex depending on the situation. An agreement shared by two vacation property owners will likely look a bit different than an agreement shared by two primary property owners.
At the end of the day, you want to keep in mind that it’s worthwhile to have an attorney assist you in drafting up the agreement. Water rights can oftentimes be complex and your agreement could present with a lot of liability if things aren’t done correctly.