Shared Well Agreement

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Shared Well Agreement

A shared well agreement is an agreement that is entered into by property owners who share the water from a single well. A shared well is a concept that is mostly found in rural neighborhoods. With such agreements, the property owners can share the cost of installation and maintenance of the well. The well is located in a particular property, and a submersible pump is also available as a water distribution system. The charges for electricity to run the pump are billed to one of the property owners, and the other property owners pay their share according to their individual meter’s readings.

The recipients of the water will need to pay their bills by a given date. The owner of the well has to take responsibility for pump maintenance while the responsibility of water treatment and pressure systems rests with the property owners sharing the water. The beneficiaries of the water from this well also share the cost of repairs and electricity.

Who Takes the Shared Well Agreement? – People Involved

A shared well agreement is a legal contract between the different property owners who draw water from a common well. There are certain costs involved in the setting up and regular maintenance along with electricity charges for the distribution of the water. These are shared equally among the owners according to the terms of the shared well agreement form.

Purpose of the Shared Well Agreement – Why Do You Need It?

A shared well agreement is required when two or more property owners decide to share the water from a single well. A shared well is used to provide water to more than one property with the objective of sharing the costs of installation and maintenance.

It is believed that the quality of the water improves when it is used by more than one property. A submersible pump helps in the distribution of water to the other properties. Normally the property where the well is located is billed for the electricity charges relating to the well.

The well is located on the property of one owner. The purpose of this agreement is to ensure that all the property owners who benefit from the well share the costs involved in the installation, maintenance, and electricity as well. The agreements are drafted as per the shared well laws in the state. The terms and conditions of sharing the water should be mutually agreed upon among the property owners involved so that there is no dispute among them in the future. The treatment of the water and the pressure systems are the responsibility of the individual owners once the water arrives at their property. 

These agreements are similar to shared driveway agreements.

Contents of the Shared Well Agreement – Inclusions

A shared well agreement should include the names of the parties to the agreement. It should also contain:

  • The effective date of the agreement: The date on which the sharing of the well started
  • Location: The location of the well from which the water is to be supplied to the other property owners.
  • Electricity and maintenance: The method of distribution of the cost of electricity and maintenance. There are individual electricity meters installed at the site of the individual properties, and billing for electricity is done on the basis of meter readings. The complete electricity bill is usually generated at the site of the well.
  • Water treatment and pressure systems: The responsibility for water treatment and maintaining pressure systems rests with the owners who are sharing the water once it enters their individual properties.
  • Water quality: The certification of the quality of water being supplied by the concerned state authority to ensure that there is no contamination
  • End-use: The purpose for which the water is being used by all the property owners needs to be mentioned
  • Site improvements: Rules with regard to making any site improvements. Any improvements in the site require prior approval of all property owners.
  • Repairs: It is the responsibility of the individual property owners who are availing of the water from the shared well to ensure that individual water pipes are repaired promptly
  • Arbitrator: The appointment of an arbitrator may be considered in case there is a disagreement between the parties.
  • The due date for payment of electricity charges: The agreement should also state the due date for payment of the energy cost by the supplied party to the supplying party.
  • Appointment of the third party: In case of dispute with regard to defaults, a third party shall be appointed.

How to Draft the Shared Well Agreement?

While drafting the shared well agreement, the following points should be kept in mind:

  • Parties to the agreement: The agreement should include the names of the parties to the agreement, and the relationship shared between them
  • Location of the well: The property in which the well is located must be mentioned in the agreement as well as the fact that there are water distribution systems
  • Purpose: The purpose of the agreement should be clearly stated, which in this case, is the sharing of water from a well by different property owners. It should also be mentioned that the shared well would supply adequate water to the individual property owners for domestic consumption and that the proper maintenance of the water distribution system would be undertaken
  • Allocation of charges: The method of allocation of charges related to sharing the well should be clearly stated with regard to maintenance and electricity. In the case of electricity, individual electricity meters are installed at the site and billing for electricity would be based on the meter readings
  • Limits of distribution: The maximum number of families to be served by the well should be stated. This would be limited to four single-family dwelling units or four parcels
  • Amendment: The preconditions with regard to the amendment of the agreement
  • Water quality: The quality parameters regarding the water being supplied and the authority to check this quality on a regular basis

Negotiation Strategy

Before entering into a shared well agreement, it is important to ensure that you properly understand the method of distribution of the expenses among the property owners. So negotiate the costs payable by you, which should be your fair share depending on usage of the water and any other factor which is being considered.

Benefits and Drawbacks of the Shared Well Agreement

The benefits of having a shared well agreement are:

  • The property owners involved in the agreement know their respective contributions towards the related expenses. The individual electricity charges will be billed according to the individual meter readings for complete transparency. The water treatment and pressure system maintenance will be the responsibility of the individual property owners. This avoids any form of a dispute later on
  • The rights of the supplier of water, as well as the beneficiaries, are protected. As long as the individual property owners are getting regular water supply, they will have to pay the supplier on time. The same applies to the owner of the well. As long as the water supply is uninterrupted, the owner will get their dues in time.
  • Amendments, if any, to be made at a later date can be carried out only through mutual consent
  • The water cannot be used for commercial purposes as per the agreement it is clearly mentioned that water is to be used only for domestic purposes

The drawbacks of having a shared well agreement are:

  • In case of a dispute, an arbitrator may be appointed, and unless the matter is settled, water supply could be kept on hold

What Happens in Case of Violation?

When a clause stated in a shared well agreement is violated, then the property owner or owners who have violated this shall have their respective water supply terminated unless all arrears up to date have been settled. It is the duty of the other property owners to make their payment not later than a particular day of the month specified in the agreement.

It is the duty of the supplier of the water to ensure that there are uninterrupted water supply and proper maintenance of the water distribution system. If there is a failure in this responsibility, the other property owners have the right to take the owner to court for deficiency of service.

The share of charges for each individual owner and the period within which they have to make their respective payments are clearly mentioned, and the same has been done by mutual consent. The errant owner cannot get into a dispute with the supplier of the water as all terms and conditions have been clearly documented.

If there is a dispute with regard to the distribution of expenses, an arbitrator may be employed if the parties agree. The decision of the arbitrator shall be final and binding(1).

A shared well agreement is important when two or more property owners wish to share the water being supplied from a well on the premises of a single owner.

A shared well performs a very important function as it supplies water for domestic consumption to different property owners. The owner of the well ensures that the water distribution system is functioning properly, and there is an uninterrupted water supply to the other property owners.

The other property owners ensure that an electricity meter is installed to measure usage, pressure systems are maintained, and they pay the supplier the dues before a specified date.

This is a mutually beneficial arrangement for the supply and consumption of quality water. If there is a deficiency of water supply or payment of dues before the due date, the errant property owner will be taken to court.

The agreement will ensure that there is equitable distribution of all costs, and all the property owners pay for their fair share of usage of the water.