What is the difference between water rights and water shares?
Utah law treats them very differently, and mixing them up is one of the most common mistakes in a land sale.
| Water right | Irrigation company shares | |
|---|---|---|
| What it is | A right from the state to divert and use a set amount of water, shown by a decree, certificate, approved application, or claim. | Stock in a canal or irrigation company that entitles you to part of the company's water. |
| How it transfers | By deed, like real estate, recorded in the county where the water is diverted and where it is used. | Like a security, through the company's transfer process, under Utah's version of the Uniform Commercial Code. |
| Goes with the land automatically? | Yes, if it is appurtenant to the land, unless you reserve it or convey it separately. | No. Shares are not appurtenant to land. |
| Where to look it up | Utah Division of Water Rights | The irrigation company's stock records |
Under § 73-1-11, a water right appurtenant to land passes to the buyer unless the seller specifically reserves it in the deed, conveys only part of it, or conveys it in a separate document before or at the same time. If you sell only part of the land a right serves, a proportional share of the right goes with it. The buyer also takes on any unpaid water assessments.
What do Utah County cities require from developers?
Many cities require a developer to convey water to the city before they will approve a rezone, annexation, or final plat. Here is what we found in current city documents:
| City | Requirement |
|---|---|
| Lehi | Water rights conveyed as a condition of annexation, rezone, or development: 3.69 acre-feet per acre in A-5 through R-1-8 zones, 4.60 in R-2, 5.95 in R-2.5, and 7.30 in R-3. Part must be able to supply culinary water, and the city can refuse rights not approved for municipal use by the State Engineer. |
| Salem | Before final plat: 0.3 acre-feet per home for indoor use, plus outdoor water based on lot size. Irrigation shares are credited by their reliable yield, such as 2.106 acre-feet per Salem Irrigation and Canal river share, or 0.505 per East Bench Canal share. |
| Highland | 3 acre-feet of pressurized irrigation water per acre, half of it stored reservoir water, according to city staff in June 2026 planning commission minutes. |
| Springville | Developers coordinate with the irrigation companies to have the water shares attached to the development transferred to the city, according to the city's 2026 water plan. |
The pattern is the same everywhere: a builder needs water to get lots approved. If your land brings that water, the builder does not have to buy it somewhere else, and you can ask to be paid for it. If you sell the water separately, expect the land price to drop.
Requirements change, and some depend on the zone or the city engineer's review. Always confirm with the city where your land sits.
Which water is worth the most to a builder?
Not all water counts the same. Cities usually credit water by what it reliably delivers, not by the paper amount, and they may only accept certain sources. Salem, for example, accepts Strawberry water, Salem Pond Company water, shares in companies that draw from the Spanish Fork River, and certain underground rights, and it values each company's shares differently.
Questions a builder will ask about your water:
- Is it a right or shares, and in which company?
- Is it culinary quality (drinkable) or irrigation only?
- What is its priority date and reliable yield?
- Has it been used in the last seven years?
- Will the city accept it, and will it need a change application to move it to municipal use?
Can you lose a water right you are not using?
Yes. Under § 73-1-4, a water right that goes unused for seven years can be forfeited, though a court action has to be brought within 15 years after that period of nonuse. Some situations do not count against you, such as water used under a written lease, land in an approved fallowing program, or years when the source simply did not have enough water.
If you are holding land for a future sale and not farming it, you can file a nonuse application with the State Engineer. Time covered by an approved nonuse application does not count toward the seven years.
For a seller, the practical point is this: a right that has sat unused for years may be worth much less to a builder, because the city may not accept it.
Do water rights need state approval to move to a new use?
Usually. Under § 73-3-3, changing a water right's point of diversion, place of use, period of use, or nature of use, such as from irrigation to municipal, requires a change application approved by the State Engineer, and the change cannot impair other water users. That takes time, which is one more reason a buyer looks closely at your water before closing.
How should water be handled in a land sale contract?
- List every right and share by water right number or certificate number, and the company name for shares.
- Say which ones are included in the price and which, if any, the seller keeps.
- Use a water rights addendum. Since July 1, 2011, a deed can include a water rights addendum under § 57-3-109 that lists the rights transferred, or states that none are. The seller completes and signs it, the buyer signs to acknowledge it, and the county recorder sends it to the State Engineer.
- Transfer shares separately through the irrigation company, with signed stock assignments.
- Update the state's records. A report of water right conveyance updates ownership with the State Engineer. It is prepared by an attorney, engineer, title producer, or surveyor, or by the owner where state rules allow.
- Address unpaid assessments, since the buyer takes them on by law.
For the rest of a land deal, see our guide to selling land to a developer and how land is valued.
Common questions
Do water rights automatically transfer with land in Utah?
A water right that is appurtenant to the land passes to the buyer unless the seller reserves it in the deed, conveys only part of it, or conveys it separately. Irrigation company shares do not pass automatically. They transfer like stock through the company.
Can I sell my land and keep the water rights?
Yes, if you reserve them in writing in the deed or convey them in a separate document. Keep in mind that a builder who has to buy water elsewhere will usually pay less for the land.
How much water does Lehi require for development?
Lehi's development code requires 3.69 acre-feet per acre in its A-5 through R-1-8 zones, rising to 7.30 acre-feet per acre in R-3, conveyed as a condition of annexation, rezone, or development.
How do I find out what water rights my land has?
Search the Utah Division of Water Rights database by owner or location, check your deed and title report for water rights, and ask your irrigation company for a statement of any shares in your name.
What happens if I have not used my water rights?
A water right not used for seven years can be forfeited, though a court action must be brought within 15 years after the nonuse period. A nonuse application filed with the State Engineer can protect a right while it is not being used.
What is a water rights addendum?
It is a form attached to a deed under Utah Code § 57-3-109 that lists the water rights being transferred, or states that none are. The county recorder forwards it to the State Engineer, which keeps state records current.
Are irrigation shares worth the same in every city?
No. Cities credit shares by their reliable yield and may only accept certain companies. Salem, for example, credits 2.106 acre-feet per Salem Irrigation and Canal river share but 0.505 per East Bench Canal share.
Water is often the quiet value in a Utah County land deal. It is easy to give away shares a builder would have paid real money for, or to stall a deal because nobody knows whether a right has been used. Before we price your land, I want a list of every right and share, what the city will accept, and what it is worth to the buyer. Then we decide together whether to sell it with the land or separately.
Not sure what your water is worth?
Share your address, parcel number, or water right numbers. Matt will look at what the city requires and what your water adds to the land, and reach out personally. No pressure and no obligation.
Thank you.
Matt has your details and will reach out personally. If it is easier, you can text him anytime at (385) 477-8138.
Sources
- Utah Code § 73-1-10, conveyance of water rights
- Utah Code § 73-1-11, appurtenant water rights pass with land
- Utah Code § 57-3-109, water rights addenda
- Utah Code § 73-1-4, forfeiture for nonuse
- Utah Code § 73-3-3, changes to a water right
- Lehi City Development Code, Chapter 27, water rights conveyance requirements
- Salem City Code Title 13, § 13-3-110, final plats and water transfer (rev. May 6, 2026)
- Highland City Planning Commission minutes, June 30, 2026
- Springville City Water Element, Utah Division of Water Resources (2026)
- Utah Division of Water Rights, water right search
Last updated October 2026. This guide is general education, not legal advice. City water requirements change and can depend on zone and engineering review. Have a water rights attorney or title company confirm what you own before you sell.
