Water Rights Explained

By 4 December 2017Property
Water Rights in Toowoomba, QLD

Water is one of our most valuable assets but many people don’t fully understand the different types of water entitlements and how they are dealt with.

WATER ENTITLEMENTS

In Queensland, the right to obtain and use water is generally from either:

  1. A Water Licence;  or
  2. A Water Allocation.

You can also access water from:

  • Overland flow – you can take overland flow water for any purpose unless there is a Moratorium Notice or a Water Plan that limits what can be taken (noting that the legislation regulates the building of any new works that take overland flow water); and
  • Riparian rights – if you own land adjoining a water course you can use the water for stock purposes only.

 

WATER LICENCES

When Do You Need a Water Licence?

You may need a Water Licence to take or interfere with (e.g. storing or impounding):

1. Surface water:

  • For stock and domestic use on lands that don’t adjoin the water course;
  • Irrigation;
  • Industrial and commercial use;
  • Storing water behind a weir or impounding water behind a storage structure; and
  • Storing water in excavations that are within a watercourse.

2. Overland flow water if the area is identified in a Moratorium Notice or Water Plan as needing a licence; or

3. Underground water.

Although previously a Water Licence was not needed for stock and domestic bores, a number of management areas now require a Water Licence for stock or domestic purposes (generally depending on what alluvium the water is taken from).

As there are a number of offences under the Water Act in relation to taking water without the required Licence, it is important that you ensure that you obtain any necessary Water Licence before taking or interfering with water.

How Are Water Licences Transferred?

Water Licences generally attach to land such that when you buy or sell a property, the Water Licence will automatically be transferred to the buyer.  Other than relocatable water licences (discussed below), Water Licences can not be  transferred separately to the land they attach to.

If a Water Licence to take water attaches to a number of lots of land and not all of the lots are transferred, the Licence will be amended to list the original and new owners of the lots as joint licences.  Generally you won’t want to hold the Water Licence as a joint licencee and the joint licensees will need to jointly apply to amend the  Water Licence to remove a licencee and their lot or to split  the Licence.

The amendment of the Water Licence should be addressed in the Contract for the sale of the land to protect your interests – i.e. to place obligations on the relevant party to amend the joint Licence to remove them as a Licencee following the purchase of the land.

Note that if the Licence is to interfere with the flow of water, the Licence will remain with the land on which the interference occurs.

 

WATER ALLOCATIONS

What are Water Allocations?

A Water Allocation is a separate asset  that is not attached to land.  Water Allocations are registered on the Government’s Water Allocations Register (similar to the Land Register) and can be transferred, leased, mortgaged, subdivided and amalgamated independently of land.

Water Allocations are either:

  1. Supplemented – i.e. the water supplied is delivered from infrastructure (e.g. dams and weirs) and is obtained from a Resource Operations Licence (“ROL”) Holder (e.g. SunWater, SEQ  Water); or
  2. Unsupplemented – i.e. the water supplied is not reliant on any infrastructure  to store or distribute it and is supplied by the Department of Natural Resources and Mines (“DNRM”).

What Do You Need to Deal With Water Allocations?

To obtain water under a Supplemented Water Allocation you must have a Supply Contract with the ROL Holder.

In  order to register any dealings (e.g. Transfers, Leases and Mortgages) of Supplemented Water Allocations, you  must obtain a Notice from the ROL Holder  confirming the existence of the Supply Contract. An Application must be made for the Notice and the  ROL Holder will need to consent to the dealing and update the Supply Contract to address it.

Only a Dealing Certificate (which generally issues as a matter of course) is however needed from the DNRM for any dealings in relation to Unsupplemented Water Allocations.

It is important to understand the processes involved in the various dealings with Water Allocations to avoid additional costs and time delays and to address them correctly in Contracts to ensure that your rights are protected.

 

OBTAINING WATER RIGHTS:

Water entitlements can be acquired with the purchase of associated land.  They can however also be acquired through:

  1. The Water Allocation market;
  2. Seasonal water assignment; or
  3. Relocatable water licences.

Sale of Water Allocations

Water Allocations can be purchased and sold independently,  similar to how land is bought and sold.  This can be done in conjunction with the purchase of land or separately.

The standard land Contract does not include any provisions in relation to Water Allocations and you need to ensure that they are properly addressed by Special Conditions (when buying a Water Allocation with land) or in an appropriate water Contract (if buying the Allocation independently).  For example, any Contract should:

  • be subject to the necessary Notice or Certificate being obtained;
  • deal with who is to make the application for the Notice or Certificate and be responsible for the costs in that regard;
  • address how water can be used and dealt with until settlement;
  • contain warranties about how much water is still available; and
  • provide sufficient time for the Notice or Certificate to be obtained.

Seasonal Water Assignment

You can also obtain the benefit of a Water Allocation by having it seasonally assigned to you – i.e. where the owner transfers part or all of the water available under the Allocation for a period to another person or place.

The ROL Holder will need to consent to the seasonal assignment of a Supplemented Water Allocation.

The DNRM will only allow the seasonal assignment of Unsupplemented Water Allocations if the relevant water plan and water sharing rules allow it.

Relocatable Water Licences

The Water Management Rules of some water management areas (currently including the Central Condamine Alluvium, Dalrymple Creek and Oakey Creek management areas for ground water) now allow for permanent transfers (relocations) of Water Licences.   In these areas you can transfer the entitlement under the Water Licence to other land that you own or land owned by a buyer (so long as the land is an allowable relocatable area under the Rules).

The DNRM assesses any requested relocation against the relevant water sharing Rules and to ensure that the change in location won’t adversely affect existing water entitlements in the area.

As your Water Licence will automatically cancel once the DNRM approves the application to relocate it (and the buyer will automatically receive the benefit of the Water Licence), it is important to ensure that the sale process is properly considered and addressed in a Contract of Sale. Again, the standard land Contract does not address the  relocation of Water Licences and special conditions will need to be included (if the relocation is in conjunction with the sale of land) or an appropriate water Contract will need to be prepared (if the relocation is not related to the sale of land).

To safeguard one of your most valuable assets, it is important to ensure that you understand your rights (and obligations) in relation to your water entitlements and that

they are dealt with properly in any agreement. Please feel free to contact our Property Law team if you have any queries in relation to water rights and how to protect your interests in that regard.

This publication has been carefully prepared, but it has been written in general terms and should be viewed as broad guidance only. It does not purport to be comprehensive or to render advice. No one should rely on the information contained in this publication without first obtaining professional advice relevant to their own specific situation.

Contact Information

Direct Line: 07 4616 9847