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Colorado Ranches for Sale: Critical Issues to Not Overlook, Part 2

In our last Colorado ranches for sale article we discussed critical issues that buyers and sellers should not overlook. The two issues we focused on were location and access, as well as leases and permits.

While these issue are critical, it’s also important to understand issues dealing with water rights and mineral rights. Let’s discuss both of those now. We will cover fences, environmental and personal property issues in our next article on this topic.

Sunlight Ranch | Colorado ranches for saleWater Rights

Perhaps one of the more critical property interests that can be acquired on Colorado ranches for sale are water rights. In many situations, the value of the water rights can exceed the value of the real property. Water rights can take the form of direct flow interests such as water passing through a ditch for irrigating hay fields, or storage rights that allow the owner to impede the flow of water and retain it for use at a later time. There are also rights in tributary and non-tributary ground water.

Title insurance does not cover water rights and opinion is generally acquired through an attorney. Water rights represent part of the bundle of rights that can be sold separately from the land, and there is an entire legal system set up in most western states that deal with water interests. Generally, it is recommended that these rights be separately identified in any contract or deed.

Water rights can also be represented by stock certificates, which are personal property and are generally conveyed by delivery of the certificate, accompanied by an endorsement of the certificate as well as the deed. Buyers should assess the status of title and adequacy of the water rights acquired. There are numerous records that can be obtained as well as officials contacted to assist in this research.

Mineral Rights

Mineral rights can be conveyed by a seller, reserved by a seller, or held by third parties by prior reservation. If mineral rights are reserved by the seller or a third party, it will be important to assess the prospects of mineral development on the property, especially in mineralized areas.

Mineral owners can install equipment, gain access to, and otherwise impact the surface estate of Colorado ranches for sale. These impacts can substantially interfere with the use and enjoyment by ranch owners and should be understood.

Colorado ranches for sale, and the vital issues sellers and buyers should be aware of, are specialties of Mirr Ranch Group. In the next and last article on this topic, we will discuss fences, environmental and personal property issues. For more information on water and mineral rights issues, please feel free to contact Mirr Ranch Group at (303) 623-4545.

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