When buying a previously undeveloped rural property in Chile, it is import to note that the water passing through or bordering a property is not the property of the landowner. When first hearing of this, foreigners often think that this stipulation is a little draconian or “overly bureaucratic”, especially when buying land in Patagonia, where water is plentiful.
However, the law makes sense when considering the diverse geography of Chile; which spans a territory from the Straights of Magellan to the Atacama Desert. In the arid regions of Chile, water is a scarce and precious resource and it would be unfair to existing property owners if a new property owner or developer appeared and consumed water that existing landowners are relying on for their consumption or business. For this very good reason, all rural land owners in Chile must petition the government to obtain water rights for their property.
In Chile water is considered a “national asset” and therefore the property of the Chilean government. Water rights are granted in accordance with the national “Water Code” (Código de Aguas) through the Dirección General de Aguas, (DGA), which awards, regulates and administers them. Individuals and corporate entities are entitled to petition the Chilean government to extract and use the water for certain purposes. Once water rights are legally obtained, they are considered the legal transferable property of the “obtainer” and are protected by the Chilean constitution.
Fortunately, in Patagonia, where water is ubiquitous, the application and award process are more of a “legal formality”, as the government has less of a concern about the need to carefully ration water.
There are two categories of water rights that can be obtained from the DGA. These are: “consumptive” and “non-consumptive”. The consumptive category includes things like potable water and water used for irrigation. Here, the idea is that the water will be “consumed” by the property owner and not be returned to the environment. The “non-consumptive” category includes things like hydro-electric projects, where the water is used to generate power and then returned to the environment.
Typically, the steps involved in the process are:
1] Investigate the property for possible sources of water.
2] Estimate the amount of water required by the owner or developer of a property.
3] Obtain the exact GPS coordinates of the water source and prepare a map (using one purchased from the Military Geographic Institute (IGM)) that shows the precise location of the water source.
4] Petition to the DGA for the water concession with the map and all other required documentation.
5] Publish the concession request in an officially recognized newspaper and on the local radio. (This is to alert neighboring landowners who may have a valid reason to oppose the concession.)
6] Wait for notification from the DGA of a final resolution (Approved / Rejected) This usually takes about six months.
7] If the DGA approves the request, register the water rights concession in the Public Water Registry (Registro Público de Aguas (RPA).
Exceptions: Keep in mind that in most cases this process does not apply to buyers purchasing residential properties in urban areas that are already connected to a municipal water system. Also, a buyer may not need to apply to the DGA for a water concession if the previous owner has already owns one, as this concession can be transferred to the new owner. However, keep in mind that “water concessions” are a separate entity, apart from the property, so these must be included in the property sale as a separate contract.
At Sur Terras we have the expertise to help you with all the steps of this process and we feel that this is a necessary service to provide all of our clients, should they require it. In most cases obtaining water rights is a fairly simple and straightforward process and not a major obstacle to buying land in Patagonia. However, all of the steps of the process must be adhered to and executed strictly to avoid procedural errors that will result in the rejection of the petitioner’s concession application. Also, should a project require larger amounts of water, or water for less typical uses, Sur Terras has a legal team available to assist with more complicated applications to the DGA.