The Borrego Water District Board of Directors held a public meeting via webinar on Dec. 14, presenting new water rules applicable to the entire real estate industry that will govern all future property transactions, with the decision handed down by a judge in a legal case. In later issues of the Borrego Sun we will be digging deeper into the issue, but for now a summary of the new rules must suffice.

In short, there will be another page or two of fine print to add to the existing stack of required papers when selling a lot or an improved property. The wording to be used is not yet formalized in writing, but BWD sent a draft to the Watermaster specifying disclosure requirements. The Watermaster will approve a standardized form to be used by all realtors in future transactions.

The general takeaway from these new rules is that because water rights restrictions will impact property values, and related paperwork must be worded to properly disclose water rights restrictions that reflect such impacts, real estate agents in Borrego 1) must be familiar with the new rules; 2) be able to refer clients to the proper organizations and authorities for additional information; 3) avoid client surprises, frustrations, and possible lawsuits; and 4) save time when closing transactions.

Real estate agents and property sellers alike will be protected from liability by the Chain of Title documentation for every property transaction that, when registered with the County, will thoroughly cover every important detail reported by the seller to inform the buyer of water rights restrictions.

Water rights must be owned, the judge’s ruling dictates, in order to pump water from our aquifer, and therefore buyers of vacant lots must purchase a Baseline Pumping Allowance (or BPA) from BWD. And future purchasers of both vacant land and existing properties will discover through Chain of Title documentation that the amount of water allocated per BPA reduces over time out to 2040.

For real estate agents, who generally act as the middle-man in property transactions, they will need to avoid liability by means of detailing on paper exactly which water rights exist, if any, for a given property, and also provide options and procedures necessary to continue either existing rights or acquire new rights. The new standardized form, when approved by the Watermaster, should cover all the bases.

Also, there is at least the implication, but not from the webinar presentation, that owners of property who prefer to do the property transfer paperwork themselves (For Sale By Owner, or FSBO), will be looking to fill in an officially sanctioned real estate form disclosing the required information ensuring compliance with the rules. Otherwise, by merely winging it with their own wording, FSBOs put themselves in legal jeopardy down the road if they miss even a single one out of a host of important new details and requirements for disclosure.

Stay tuned for more detailed reporting on local real estate agents and owners of vacant and improved land responding to issues and questions regarding disclosure.