A farmer in Stark County, North Dakota is selling his 640-acre farm to a buyer named Lars. The property has been irrigated for decades using a water appropriation permit issued by the North Dakota State Water Commission. Lars wants to continue using the irrigation system after closing. Which statement best describes how the water appropriation right is treated in this transaction?
Correct Answer
D) The water appropriation right is appurtenant to the land and transfers with the property, subject to State Water Commission approval of the transfer
In North Dakota, water appropriation rights that are appurtenant to the land (meaning they are tied to a specific parcel for irrigation or other beneficial use) transfer with the property when the land is sold. However, the transfer of the appropriation right must be approved by the North Dakota State Water Commission. The buyer, Lars, would need to notify or obtain approval from the Commission to formally transfer the permit into his name. Licensees must understand this when facilitating agricultural land transactions, as failure to address water rights can create title and use issues post-closing.
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Related Concepts
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License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
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