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DWE Home > Home > Water Management > Water access and trade > Assigning Share Component

Water licensing and trading

Assigning Share Component

A water access licence holder may wish to sell all or part of their share component (their share of the available water under the licence) to another licence holder. If you want to buy share component and don't already hold a licence, you can apply to DNR for a new water access licence with a share component of zero units.

A typical assignment of share component

Greg has a water access licence with a share component of 120 units. He wants to scale down his irrigation and sell half of his share component. Jenny has a water access licence with a share component of 40 units and she wishes to purchase additional share component so she can expand her irrigation enterprise. The two parties agree to the sale price and terms and complete the Application to assign share component between water access licences (under section 71Q of the Water Management Act 2000).

Do I need to contact DNR?

We suggest you contact your local DNR office before you fill in the application to determine if the dealing is possible in the water source.

Do I need consent from other people?

The holders of both licences must sign the application form.

When registering the notification of the share assignment at LPI, the consent of the holders of any registered security interests (mortgages and company charges held by a bank or other lending institution) in the licence being reduced is also required and the water access licence certificate must be produced.

What should the buyer check?

You should undertake a search (this can be done on-line) of the Water Access Licence Register operated by Land and Property Information NSW to determine whether:

• the licence holds the required share component
• the licence is current
• the seller holds the licence and has the authority to sell the share component
• there are any registered security interests, caveats etc on the licence.

Will contracts need to be drawn up?

It is recommended that contracts be drawn up to cover the conditions of the share assignment.

How do I apply?

The application form Application to assign share component between water access licences (under section 71 Q of the Water Management Act 2000) (Word file) (PDF file) needs to be completed by both parties and submitted with the application fee of $250. The application form is available from DNR offices or from our website.

How is the application processed?

If the application is complete it will be registered on DNR's database and the fee processed. Rejection may occur if either licence is currently suspended.

The application will be assessed against the water sharing plan rules, dealing principles and provisions of the Water Management Act 2000. The potential impacts of the dealing may also be subject to local impact assessment, particularly for applications affecting unregulated rivers or groundwater aquifers. DNR will advise the contact person nominated in the application form by letter of the result of the application, known as the Notice of Determination.

Who registers the share assignment with LPI?

After the Notice of Determination has been received and the purchase settled, it is the responsibility of the applicant (or agent) to register the share assignment at LPI. The following documents must be lodged with LPI:

• LPI Notification Form
• the current edition of the water access licence certificate for the licence being reduced
• all registered security interest consents (if these have not been discharged as part of the sale) for the licence being reduced.

It is in the interests of the buyer to have these documents lodged as soon as possible as the dealing is not legally effective until it has been registered. A lodgement fee of $73.25 is charged by LPI to issue the licence certificate for the licence to be reduced. An additional fee of $73.25 will be charged if a new edition of the licence certificate is required for the licence to be increased.

Note: This information does not constitute formal legal advice.