Resolving the predicament of well water and Well Share Agreements

By Kate Hotz

Real Estate Agent with Haymore Real Estate

February 21, 2008 07:02 AM

Far too often we as Realtors find ourselves trying to answer questions regarding Well Shares here in Cochise County.

I would like to offer a place where well share holders, Realtors and future property owners can go to get their questions answered, to be directed in the right direction and to have an avenue to bounce ideas off of others that may be going through similar issues.

Matters regarding water and water rights are filled with emotion, when posting, please do so with tact. The purpose is resolution, direction and education.

The search for law that dictates how Well Share disputes are to be handled is a little tough to find. Any of you who have tried, knows. The time it takes to learn what you are entitled to as a shareholder is daunting, so when many issues could be resolved, most often shareholders acquiesce, but this only perpetuates the problem. Learning what you can do to make a change is vital.

I have two sample well agreements which were forwarded to me from the Arizona Department of Water Resources. ADWR is not endorsing these particular Well Share Agreements, but they felt the verbiage was more comprehensive than most and the content applicable to today's issues with Well Shares. If anyone would like to see a copy of the verbiage I am happy to forward them along. Just email me with a request.

If you are going through a well share issue, hang in there! Working together we can make a difference!

Kate Hotz - 520-227-9861

Haymore Real Estate

www.KateHotz.com

Kate@KateHotz.com

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Brad Snyder

Sierra Vista Realty - Sierra Vista, AZ

Kate...

Congrats on getting set-up on ActiveRain and your first blog post. ActiveRain is a good resource and will definitely help your web position. Let me know if you need my help.

Brad

Feb 23, 2008 12:56 AM

Anonymous

Richard

I am considering a well share that is necessary for the land that I may purchase, from the looks of things there could be issues with this type of agreement, I would like to know what type of issues can arise, so that I can make an informed decision.

worst case scenario: Can my water be cut off by the owner of the well if a dispute arises, lets say in a disaster situation and police an lawyers are not in the equation.

would I be better off with my own well (Say 500ft deep), or is this too costly to Drill and then maintain?

Thank you

Nov 22, 2009 01:31 AM

Anonymous

Amy

I live in Hereford, Arizona and I have someone on my well share that has not paid their bill in over 3 years. We have also had repairs do too. Can I take her to small claims court? Can I file a lien?

Jun 03, 2010 12:01 PM

Anonymous

Tom Woodworth

I own 40 acres northwest of Tucson and am planning on selling 13.33 acres of it. I have a well drilled and plan to offer the property with a wellshare. I realize the importance of a properly executed wellshare agreement, and would welcome any comments regarding that agreement. Thanks.

Aug 31, 2010 12:24 AM

Kate Hotz

Haymore Real Estate - Sierra Vista, AZ

Typically, what happens in a well share agreement if/when there is a dispute, is one party chooses not to pay their monthly bill, and the other paying parties have very little recourse other than to take the non-paying-party to small claims. Small claims is usually sucessful, but it is a hassel. The best recourse to resolving well share disputes is to get your own well.

I want to make sure no one makes the mistake of turning off the non paying share-holder's water. DON'T DO IT!! You dont' have that right, just because they haven't paid. Imagine the damages if someone got sick or animals died. How horrible to have that bite you in the butt. Once taking them to small claims however, if you are the prevailing party, and they still don't pay, you can file a lien against their property. Then they can't sell their property without satisfying the lien.

Steps to ensuring well quality prior to purchase: Equipment needs to be maintained on a well, and if all parties do not understand what is needed, they really don't invest the small dollars as needed, to help prevent bigger issues down the road, and if/when a pump goes out, you are looking at several thousand dollars and unless the well share agreement provides for, and has been followed regarding an escrow fund for big ticket repairs, most home owners do not have the money, and the issue snowballs VERY quickly.

Make sure to have a well inspection done prior to purchase, and BE THERE when the well servicer arrives. That way you can ask him/her questions so that at least YOU can be informed. And whomever the administrator for the well share may be (and it is not always the party on whose property the well is located) make sure you meet with them prior to purchase. If they seem flaky, or the books seem poorly organized... you can make up your mind how much you like the home and/or land... just make sure you are well informed (no pun).

When looking for a comprehensive well share agreement, look for things that deal specifically with repairs and extra monies to be paid monthly until a cap is reached. If the escrow (big ticket) funds have to be dipped into, then each party starts paying a nominal amount into the account until the well "nest egg" is replenished, at which time the bill resumes at a shared amount. Having meters on the property is another way to mitigate potential issues. When all parties are billed according to what they use, there is less room for argument, but doesn't eliminate it entirely.

For anyone in need of a well constructed well share agreement, please just send me an email. I will forward to you a pdf of a well share agreement which I received from ADWR. THE WELL SHARE AGREEMENT WAS SHARED BY ADWR, NOT ENDORSED!! It is for your information only from which you can base your own agreement. People are people, and problems will arise.

If you have a property you are considering selling with a well share agreement, you will provide security and comfort by making sure the well and agreement are well constructed. Also, keep in mind, FHA, USDA & in most cases VA will not provide financing for properties which are serviced by a well on a greater than 1/4 share. This changed just a few years back, and may change again, so prepare yourself for what is at least required NOW, not to mention inscreasing your buyer's market.

Sep 02, 2010 08:14 AM

Quinn Eliason

Orem, UT

Anonymous

Dale Nolden

I have purchased some land with a Share Well Agreement attached. The well is on the neighbors property and he is demanding monies for maintenance and monthly fees above and beyond what the Well Agreement has specified. I am soon to finish a house on the property and will be in need to use the Well Agrement that I purchased with the land . Do you have suggestions to the procedure I should follow to gain the desired water pressure when I get my CO for my new house?

Dec 28, 2010 11:09 AM

Anonymous

Jeri Walsh

My lawyer is helping do a Well Agreement, the one burning questions is how much do I charge my neighbor for their water usage. Right now it's a flat $30 for the agreement but these people waste and use water like crazy. Is there way I can bill them for a flat amount of water per month and if they go over that amount, the costs will go up according to the overly the monthly allowed usage? My well is hooked in with the rest of my electricity. The agreement will state that we both put in meters so the water usage can be tracked. But tracking the costs is the issue for me.

Aug 19, 2015 01:36 AM

Anonymous

Margie McKinnon

We purchased a house with a well agreement, but have never received a bill for usage. The neighbor has never spoken with us or answered the door when we attempted contact. It's nice not to have to pay a bill but would you recommend doing anything besides waiting to see if they ever contact us?

Nov 26, 2015 12:34 PM

Anonymous

cheryl schroeder

I have a tax lein property I foreclosed on that has a shared well on the property. This was put in several years ago and 2 parties signed it over a decade ago who are no longer living there. What happens to this agreement after a tax lien forclosure. I have heard that all agreements are wiped out, Does this include well share agreement? The well is on my property and was I was not required to sign anything regarding any agreement pertaining to the well.

Nov 01, 2016 12:48 AM

Caterina Platt

Evergreen Appraisals & Realty - Los Lunas, NM

Hello Kate,

Thank you so much for sharing this info. I'm in neighboring NM and would be very thankful if you could share these with me. Dealing with a listing that has a very poorly written well share agreement. No provisional account was created, and a pending repair stands to block our sale under contract. I've contacted an attorney to draft the amendments to the agreement, but it is always helpful to see what has worked for others and not reinvent wheels.

Thank you so much!!

Mar 30, 2017 06:11 AM

Anonymous

Antonio pantoja

Anyone still replying to these questions

May 25, 2017 05:03 PM

#11

Anonymous

Frank Cortez

Can a well distributor shut off water supply on shared well when resident is paying sharmed cost ?

Jul 29, 2019 03:47 AM

#12

Resolving the predicament of well water and Well Share Agreements

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Kate Hotz

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