Water Securities: Rights to Use, Used as Collateral

If water markets were really as simple and beneficial as most academics suggest, then the West would be overrun with them. Water market scarcity in the United States illustrates how even really good ideas, proposed by very talented minds, often stagger and lurch toward acceptance and implementation. This Note looks at the water-rights market and suggests that some deficiencies result from the unique manner in which the law treats water rights. Utah, for instance, considers water rights as a form of real property.

Yet abandonment and forfeiture annihilate water rights completely, while other forms of real property cannot be destroyed. This disconnect—between two forms of property that are functionally different but legally similar—adds abstraction and uncertainty to the marketplace, which in turn impedes further development of the marketplace itself.