Does the Ditch Share Come With the House?

The seller walks you along the property line and points at the lateral behind the fence. Everybody knows water rights run with the land. That sentence is doing a great deal of work, and for ditch shares, which is what this question is usually about, it isn't true.

The short answer: In Colorado, a mutual ditch company share is personal property, not a piece of the ground: the statute deems it so and makes it transferable in the manner provided by the company's own bylaws, so there is no general answer. The standard contract reflects that by giving water stock a blank with no default rule, and by asking for a separate legal instrument at closing. Name the share on that line either way: under one regime it is the only way the share joins the sale at all; under the other it costs nothing.

Not water, and not land

A share in a mutual ditch company is stock in a corporation. The corporation holds the water right; you hold paper entitling you to a pro rata share of what it delivers. Colorado's ditch and reservoir company statute says so directly: the shares of stock are deemed personal property, and are transferable as such in the manner provided by the bylaws.

Both halves matter, and the second is the one nobody quotes. Personal property means the share is not swept along as an appurtenance the way an easement or fixture is. In the manner provided by the bylaws means the legislature left the manner of transfer to each company rather than setting one rule for all.

The contract's own opening language is what makes the misconception so durable. It conveys the real estate together with the interests, easements, rights, benefits, improvements and attached fixtures appurtenant thereto, and much does ride along on those words. A stock certificate is not among the things they reliably reach.

Four kinds of water, four different instruments

Colorado's standard residential contract does not have one water clause. Its water and well section has separate rows, each moving by a different mechanism:

A ditch share sits in the last row. Boulder County's guidance describes the mechanics: the share transfers by an assignment form or slip assignment on the certificate, after which the company issues a new certificate and records the change of ownership in its stockholder registry. The assignment form comes from the company, not the closing table: a closing agent prepares the deed and the bill of sale, and generally not a ditch stock assignment. A certificate nobody can find usually means an affidavit and a board that has to act, which runs in weeks rather than days. The conveyance should also be recited in the vesting deed, so a recorded instrument gives notice of it. That recital is prepared by the closing attorney or title company, not by the contract.

Two companies, two answers

Real Colorado companies land in different places, and you can read it in their own words.

The Silver Lake Ditch and Reservoir Company, whose water runs through north Boulder, states that its shares go with specific pieces of land and cannot be bought or sold as separate from the land.

The Lower Clear Creek Ditch Company says close to the opposite: ditch company stock certificates are considered personal property in Colorado and may be sold by the rightful owner without the company's consent. Its transfer process still wants the original certificate endorsed, a board that verifies the assessments are paid, and a fee per certificate.

Neither is wrong. The statute sends the question to each company's bylaws, and these two companies publish opposite positions on whether a share can be severed, which is exactly what you get when the legislature lets each company write its own rule. This is why the honest answer to the question in the title is another question: which company, and what do its bylaws say?

A seller pointing at the running lateral isn't lying, either: the water has arrived every June for as long as they have owned the place. But the water arriving is evidence of one thing only: that the water arrives. Who owns the share that sends it is settled somewhere else, on paper.

The blank that has no default

Most of what stays with a Colorado house is decided by printed lists, whose whole point is that silence still produces an answer: what conveys is settled for you even when nobody negotiates it.

The water stock line is different in kind: a bare blank with no default clause attached. Nothing in the section says unlisted shares convey, and nothing says they are retained. If the line is empty, the contract simply has no position on the share, and a deed does not, by itself, move a certificate on a company's books. Which regime that company runs decides the rest.

The risk isn't losing an argument about a share. It is closing on a place you chose for the water, then finding out the following June that nobody ever agreed what happened to the share, and that the answer sits in a set of bylaws nobody read.

Which is why the instruction doesn't require knowing the regime: put the share on the line. Where shares sever, that is what brings the share into the deal. Where they do not, you have written down what both sides believed they had agreed.

What a ditch share carries with it

Two things travel with a share that a buyer won't find in the usual places.

Unpaid assessments are a lien on the share, and the statute makes it perpetual. A company may assess its stock to keep the ditch in repair, and that lien runs against both the shares and the water rights behind them until it is paid. The same provision lets the company withhold water in the meantime, and lets it provide for forfeiture or sale of the stock in default. So a share can look perfectly transferable and deliver nothing, or stop being the seller's to sell. What settles it is a current assessment statement from the company, in writing; the seller's recollection is not evidence, and the title commitment will not carry it.

Title insurance isn't the backstop here. The standard exclusion is explicit: standard land title insurance policies do not insure against defects in title to water rights, regardless of whether the water right was conveyed by separate deed or in the land deed. So the commitment your broker reads for recorded exceptions, and the tax certificate that arrives beside it, won't tell you whether the share is clean. The company's own books will.

The water deadline, and how to get the paper

The contract anticipates all of this. It carries a Water Rights Examination Deadline in its dates and deadlines table, with the buyer's right to terminate if the examination is unsatisfactory to the buyer. It is one row our guide to the deadline schedule does not cover. Like every deadline on that form, it only exists if someone dates it: left blank, the right to terminate over water goes with it.

Whether a share is why you offered on this place, or why you have been telling buyers the water comes with it, the sequence is short, and it doesn't start with a phone call. Read the deed first. The vesting deed is recorded at the county clerk and recorder, so either side can pull it without asking the other, before an offer exists. Its granting clause, and those of the deeds before it, may carry a recital conveying shares of capital stock with the ground. That is the cheapest way to learn a share exists at all and which company issued it. Then ask that company, not the seller, what its bylaws do with shares on a sale and whether the assessments are current.

A deed that says nothing is not an answer. Recitals get left out, so silence sends you to the company's stockholder registry rather than ending the question, and it is why getting the recital right at your own closing matters to whoever buys next. On unincorporated acreage this is routine diligence, alongside the well and septic questions the Longmont-area guide covers.

Then give yourself a way to get the paper. The water rights review is a right to terminate, not a right to demand: it obligates the seller to deliver nothing. Other Documents, in the due diligence section, is the blank that does. Write the certificate, the articles and bylaws, a current assessment statement and the transfer requirements onto it. If the three matching rows carry dates, delivery, objection and resolution deadlines attach to that list, on the timing the due diligence documents deadline sets out.

This is general information, not tax, legal, or financial advice; confirm your specifics with a CPA or attorney before you act. We will not tell you whether a particular share conveys, and neither should anyone who has not read that company's bylaws and your contract. The form takes the same view: it records that your broker has recommended consulting your own attorney where water rights are included or excluded in a sale.

The document is the same on both sides of the deal; only the timing changes. A buyer wants it named on the water stock line, a date on the water rights examination row, and the paperwork requested in the Other Documents blank, with its three deadline rows dated, all before signing. A seller wants the certificate and a current assessment statement in hand before the listing photos, because "includes ditch water" in the MLS is a representation they have to be able to deliver, hardest to produce on a home held for decades. Which blank does what is a conversation to have with your broker, and every one of those blanks is filled in before an offer is signed rather than after — what else gets decided at that moment.