by Greg Walcher, E&E Legal Senior Policy Fellow
As appearing in the Daily Sentinel
In the 1920s a tremendous real estate boom convinced investors all over the country to buy development land in Florida, much of which turned out to be undevelopable swampland. It resulted in anti-fraud legislation, and is forever known by the common expression, “If you buy that, I have some land in Florida for you.”
“Caveat emptor” is the Latin legal term, meaning “let the buyer beware,” a contract law principle in the sale of real property, in which the buyer is assumed to have the ability to find out what he is buying in advance. He cannot blame the seller later if the property turned out to have issues he could have known about, had he checked. The principle certainly applies to speculators buying farmland in the Grand Valley, hoping to make money by sending the water downstream to California.
In the arid West, water is often worth more than land. So buying land in order to obtain the water rights is not uncommon, especially on the Eastern Plains, where entire counties of once-productive farmland has been dried up by thirsty cities like Aurora and Colorado Springs. But there is a problem with that in western Colorado, because the thirsty cities are downstream, especially in California. And transferring Colorado agricultural water to California, though it could be highly profitable, is illegal. So is speculating in water.