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DWE Home > Home > Water Management > Water access and trade > Term transfer of a water access licence

Water licensing and trading

Term transfer of a water access licence

A water access licence holder may wish to transfer their water access licence or, in the case of a co- holder, their holding in a licence to some-one else for a set period of time - usually a couple of years. This is like a rental agreement; the ownership of the licence does not change. However during the period of the term transfer, the transferee is responsible for the water taken, payment of fees and charges and compliance with the terms and conditions of the licence.

A dealing involving a term transfer does not, by itself, allow the water to be used at a different location. If the licence is to be used at a new location within the water source or extracted by different works, you will need to also apply to change the zone and/or nominated work on the licence (see Changing the location where a water access licence can be used).

A typical term transfer

Bill has a water access licence with a share component of 120 units. He has agreed to lease his land and transfer his water rights to Sue for the next three years to irrigate crops on his property. The two parties agree to the price, conditions and time of the term transfer and complete the form Term Transfer under Section 71N of the Water Management Act 2000 to have Land and Property Information NSW register this arrangement.

Who do I contact?

Term transfers are handled by Land and Property Information NSW (LPI). You should call LPI if you have any questions about registering a term transfer.

Do I need consent from other people?

To register a term transfer of a whole licence at LPI, the written consent of all holders of the licence and all registered security interests in the licence is required. Security interests may include mortgages and company charges held by a bank or other lending institution.

To register a term transfer relating to just a holding in the licence (rather than the whole licence), the consent of the co-holders and registered security interests in that particular holding only is required. The term transfer of a holding is most likely to arise where a water access licence is used to supply a number of separate properties in a joint water supply scheme.

What should the buyer check?

Before deciding to enter into a term transfer agreement, the buyer (ie the term transferee) should undertake a number of searches to verify the licence details and status and any outstanding charges.

Land and Property Information NSW

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

• the licence is of the right category and holds the required share component
• the licence is current
• the other party holds the licence and has the authority to undertake a term transfer
• the licence is linked to any water supply works
• there are any registered security interests, caveats etc on the licence.

State Water

State Water can provide information on the water allocation account and fees that are likely to fall due, and any outstanding water charges.

Once the term transfer comes into effect, the term transferee becomes responsible for all charges to be paid, even for water taken before the transfer. The two parties should agree on how the water charges will be paid.

Department of Infrastructure, Planning and Natural Resources

DlPNR's website (see: section on public registers) or regional office can provide information on:

• licence conditions
• conditions and status of water supply works approvals.

Will contracts need to be drawn up?

It is recommended that contracts be drawn up to cover the term transfer.

Who registers the term transfer with LPI?

Once the contract has been settled, it is the responsibility of the term transferee to register the term transfer at LPI. The following documents must be lodged with LPI:

• LPI term transfer form - W -O7TT
• the current edition of the water access licence certificate, except for licences associated with joint water supply schemes where no certificate is issued
• the notice of sale form
• all registered security interest consents.

A lodgement fee of $73.25 is charged by LPI to register the term transfer and issue the next edition of the licence certificate. The term transfer becomes legally effective only when it is registered by LPI.

Note: This information does not constitute formal legal advice.

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