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Water rights in secured transactions

Many lenders and sellers accept mortgages or deeds of trust on lands served by water rights to guarantee a loan in spite of the fact that those water rights may give the land its real value. In a surprising number of these transactions the water rights are carelessly researched and described, if not completely ignored. In Colorado and other western states, careful drafting is necessary to assure that a mortgage or deed of trust is properly secured by the water rights associated with the encumbered land.

In addition, because the value of a water right is generally limited by its historic use, and because paper records alone cannot be relied upon by a lender taking water rights as security, a careful examination of the water proposed as security should be undertaken by a team of water lawyers and water engineers before any transaction is completed. Curtis, Justus, & Zahedi, LLC performs all legal services necessary to assure that water rights are properly taken as security and we also advise clients about the potential value of the secured rights.