Buying Rural Property With a Well or Water Licence in BC

Rural and acreage properties in British Columbia often get their water from a well, from a water licence, or both. Before you commit, it helps to know whether the water use on the property is allowed, and what you would be taking on after closing.

This article explains how groundwater licensing works under the Water Sustainability Act, what happens to a licence when land is sold, and how to check the quality of well water. Surface water such as creeks and springs, and septic systems, depend on separate rules and are worth raising with a lawyer.

This article covers the law of British Columbia.

When groundwater use needs a licence

In general, a person needs an authorization to divert or use water in British Columbia. There is a specific allowance for household use: a person may divert and beneficially use groundwater from an aquifer for domestic purposes, subject to the regulations.

In practice, households using well water for domestic purposes are exempt from licensing and from paying provincial water fees and rentals. The exception is non-domestic use: all users of groundwater for purposes such as irrigation, commercial or industrial use need a licence.

So if you are buying acreage and plan to irrigate a large garden, run a business, or water livestock or crops, ask early whether your intended use counts as domestic. A lawyer can help you with that question.

The March 1, 2022 deadline and first-in-time priority

Existing non-domestic groundwater users had to apply for a water licence on or before March 1, 2022 to keep a priority date based on when they began using the water.

Those who missed that date must apply as new applicants, and the date of their application sets their priority. The system works on a first in time, first in right basis. A later priority date can matter in dry periods, because earlier licences come first.

• If the seller uses well water for irrigation or business, ask whether a licence application was made and when.
• Ask for a copy of any licence or application, and check the stated use and quantity.
• Do not assume that long-standing use gives the property a strong priority date.

What transfers to you with the land

Rights under a licence that is appurtenant to land pass with a conveyance or other disposition of that land. Appurtenant simply means the licence is attached to the property rather than held separately.

A licence's rights and obligations, including water rental payments, are tied to the land on the Land Title, so a buyer takes on the licence and its rentals. Before completing the sale, the owner must give written notice of the conveyance to the comptroller or a water manager.

Ask your lawyer to confirm that the notice is part of the closing steps, and to check how the licence is recorded against the property.

Costs of a groundwater licence

A groundwater licence application carries a one-time application fee, with a minimum of $250. There are also annual water rental fees that depend on the purpose of use and the quantity of water.

Households using well water for domestic purposes do not pay provincial water fees and rentals. If the property has, or needs, a licence for non-domestic use, build the rentals into your budget.

Testing the well and a pre-purchase checklist

Health Canada guidance says to test well water for microbes at least once every 6 months. Any E. coli in a sample means the water is unsafe to drink.

Nitrate can only be found by a lab test. Health Canada's maximum acceptable concentration is 45 mg/L, which is 10 mg/L as nitrate-nitrogen. A neighbour's well result cannot be relied on, so test the well on the property you are buying.

• Ask how the property uses water: domestic only, or also irrigation, commercial or industrial use.
• If there is a licence, get a copy and confirm the use, quantity and priority date.
• Ask about the annual rentals and whether they are paid up.
• Confirm the seller will give the required written notice before completion.
• Arrange microbe and nitrate tests from a lab, and keep the results.
• Make your offer conditional on satisfactory water testing and licence review where possible.
• Have a lawyer review the contract and the water documents before you remove conditions.

Frequently asked questions