Maria, an associate broker in Albuquerque, is preparing a purchase agreement for her buyer client. The seller has a well on the property and holds a water right certificate from the New Mexico Office of the State Engineer. Maria's buyer wants to ensure the water rights are included in the purchase. What must Maria do to properly address this in the purchase agreement?
Correct Answer
B) Explicitly include the transfer of water rights in the purchase agreement, since they do not transfer automatically with the land
Under New Mexico's prior appropriation doctrine (NMSA 1978, Chapter 72), water rights are a separate property interest from land ownership and do NOT automatically transfer with the sale of real property. A deed conveying real property does not convey appurtenant water rights unless explicitly stated. Maria must specifically address the transfer of water rights within the purchase agreement to ensure the buyer receives them.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
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