Farmers affected by water rights changes in the Mackay Region

Water… humans and animals cannot live without it; you certainly cannot grow crops without it; in fact, some University professors predict that World War III will be fought between countries over it!

We are not quite at that level yet (thankfully), but in June 2015 the Department of Natural Resources and Mines (DNRM) in their newest Pioneer Valley Resource Operations Plan have changed the way that some water rights are treated, which is still causing some unrest and confusion among farmers.

If you owned a farm before June, 2015, you probably had a Water Licence that was attached to a bore or nearby river which was used to either irrigate your crops or provide water for your stock. A Water Licence attached to the land, so when you bought or sold the farm, the Buyer automatically received the Water Licence and did not have to do anything to ensure it transferred to them so they could continue to use the bore or pump on the river.

Since June, 2015, under the new Resource Operations Plan, many of these Water Licences have been converted to Water Allocations. Water Allocations differ from Water Licences, in that they do not attach to the land and have their own separate ‘title’. The biggest advantage coming out of this change is that these water rights are now separate and tradeable, meaning farmers are able to sell or buy more water for their farm to and from other farmers in the same area or along the same river.

If you are selling or buying farm land that used to have a Water Licence, you should check firstly if this has been changed to a Water Allocation. You can make enquiries with the Water Services Team by calling them on 1800 822 100 or going to the following website: https://www.dnrm.qld.gov.au/__data/assets/pdf_file/0004/275467/pioneer-rop-amendment.pdf.
If you visit this website, you can download a copy of the Resource Operations Plan (June, 2015) which lists all the Water Licences in the region that have been converted to a Water Allocation. You can just search for your name in the list!

If a Water Licence has been changed to a Water Allocation and you are selling your farm, the Water Allocation title description needs to be noted on the Contract of Sale. The Water Title will also need to be included on the transfer documents so it is transferred to the Buyer upon settlement.

If the Water Allocation is not transferred with the farm upon settlement, then the Buyer may lose the right to draw water from the water source, which can be crippling to the Buyer! The Seller will retain ownership of the Water Allocation and is free to sell it to a third party. The down-side for the Seller who retains the Water Allocation is that if there are any compliance issues with the Water Allocation (ie. the Buyer has continued to use the water source and has drawn more than is allowed, then the Seller may be responsible for these actions to DNRM (as they are still the legal owner of the Water Allocation)).
 
If you are buying or selling a farm, please discuss what water rights attach to the property with your solicitor to ensure that any water rights get transferred with the property if they are meant to be included in the sale. If they are not to be included, consider adding a clause into the contract confirming that the Buyer is not obtaining the benefit of the Water Allocation currently situated on the property to avoid any confusion.
 
If your property is affected by the new Operations Plan, then you should be receiving information on how this affects your property from the DNRM.
 
For further information you can also visit the website www.business.qld.gov.au and search “Water Allocations” which will give you more information on your water rights.
 
Alternatively, please feel free to contact one of our Rural Property Law Team members to discuss further.