What You Need to Know About Water Licence Trading

By 30 September 2019Property

In the past, Water Licences (as opposed to Water Allocations) have attached to land and could only be transferred with the land they were attached to. Water Licences were not separate assets in their own right and could not be transferred or traded independently of land.

Over the past few years however, a number of Water Management Plans have been introduced or amended to allow for the permanent relocation of a Water Licence (or part of its entitlement) to other land. At the time of writing, the Barron, Condamine and Balonne, Cooper Creek, Great Artesian Basin, Gulf and Wet Tropics Water Plans allow for the relocation of Water Licences.

This means that Water Licence Licensees in these Water Plan areas can:

  • relocate the Water Licence to other land they own in the same water area; or
  • sell the Water Licence to another land owner in the same water area.

In order to relocate the Water Licence, the Licensee must:

  • obtain the written consent of each interested entity that has a financial or other interest in the land the Water Licence is being transferred from (e.g. Mortgagees, Tenants);
  • make an application to the Department of Natural Resources, Mines and Energy (“the Department”) for the relocation; and
  • if the Department approves the Application, accept its offer within the set timeframe.

When the Department receives an Application, it must assess it against the protocol and water sharing rules of the relevant water management area and undertake an impact assessment to determine how the relocation may affect the underground water source. This process is aimed at ensuring that the relocation of the Water Licence won’t adversely impact on the water security of other existing entitlements in the area or the environment.

The ability for a Water Licence Licensee to relocate a Water Licence has meant that market for the sale of Water Licences has now opened up.

It is however important to ensure that both Buyers and Sellers fully understand the requirements and timeframes for any proposed relocation and that the Contract of Sale adequately addresses these issues and protects their interests in that regard.

Murdoch Lawyers has assisted a number of clients in both selling and buying Water Licences under the relocation process and we invite you to contact our Property Law Team if your require assistance in that regard.

This publication has been carefully prepared, but it has been written in general terms and should be viewed as a 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.

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