Water rights
Water is a critical input and a legally scarce resource in Chile. For a mining, energy, agriculture or green hydrogen project, securing the right to use it decides whether the investment is viable, and the 2022 reform changed the rules.
LEGAL FRAMEWORK
Legal framework
Water is a public good and its use by private parties requires a water use right constituted or recognized under the Water Code. That right is an asset distinct from the land where the water is captured, may be transferred, encumbered and recorded, and is subject to availability, effective use, registration, oversight and forfeiture. Since the title is independent of the land, buying the property does not guarantee the water; Chile ranks among the countries with the highest water stress in the world, with northern basins where no new rights are granted, so any waterintensive project must address it from the outset.
The Water Code was set by DFL No. 1,122 of 1981, of the Ministry of Justice, published on October 29, 1981, and defines water and the use right and how it is constituted, exercised and forfeited. The most profound amendment is Law No. 21,435, published on April 6, 2022: it made new rights temporary, raised human consumption and subsistence to legal priority, strengthened lapsing and forfeiture for non-use, and introduced non-extractive or in-situ rights; much of its effect operates through transitional provisions still in force.
Adjustment laws followed. Law No. 21,586 (July 13, 2023) extended the registration deadline and introduced title perfection under the DGA; Law No. 21,727 (February 18, 2025) extended the registration deadline to April 6, 2027; Law No. 21,740 (April 23, 2025) amended DGA enforcement and oversight.
The General Water Directorate (DGA), under the Ministry of Public Works, is the central regulator. It grants rights, declares availability or exhaustion of sources, sets the ecological flow, administers the Public Water Registry, applies the non-use fee and conducts lapsing and forfeiture. The risk lies in subsequent reforms and still-live transitional deadlines, so pin down the version and date of each deadline when deciding.
TYPES OF RIGHTS
Nature and types of rights
Water, in any of its states, is a public good (Article 5 of the Water Code), not subject to private appropriation. What is granted to private parties is the water use right (Article 6 of the Water Code), a real right entitling its holder to use and enjoy the resource. The final paragraph of Article 19 No. 24 of the Constitution grants ownership over those rights, with constitutional protection the 2022 reform did not remove for already-constituted rights. Three features define it.
Non-consumptive. Require the water to be returned per Permanent. Authorize capture at any time subject to the constituting act (run-of-river hydropower). availability.
Contingent. Only authorize use of surplus water once Continuous, discontinuous or alternating. Depending permanent rights are satisfied; over a stressed source they on whether use is uninterrupted, by periods or by turns. are worth far less than their nominal flow.
Surface and groundwater. The groundwater regime is more demanding; a 200-meter protection radius applies against third-party wells.
Non-extractive or in-situ. Introduced by Law No. 21,435 for environmental conservation, sustainable tourism or recreational projects; they keep the water in its channel and, requiring no works, are not subject to the non-use fee.
OGC view
The nominal flow is not the right’s value; the combination of classes sets supply security, so demand the full classification.
THE 2022 REFORM
Constitution of rights and the reform
There are two routes: applying for the right before the DGA or acquiring it from a holder. Original constitution proceeds if third-party rights are not harmed, water is available and the public interest is respected. Availability is the hardest condition. It has a physical dimension — water existing at the source — and a legal one, since rights cannot be constituted over those already recognized to third parties, and a minimum ecological flow must be respected. Scarcity has made two restrictive figures on groundwater frequent. In restriction areas the DGA only grants provisional rights; in prohibition zones it grants no new ones. In both cases, by operation of law a Groundwater Community (CASUB) is constituted. When several applications compete for insufficient water, the DGA resolves by auction (Articles 142, 143 and 144 of the Water Code).
OGC view
In northern basins or those under restriction or prohibition, assume the route will be to buy, and commission the legal availability report before choosing the location. The five changes of Law No. 21,435 Under the previous regime, the right was constituted in perpetuity. The reform preserves ownership of alreadyconstituted rights, but introduces for new ones a focus on water as a human right, with five changes. Temporariness. New rights are granted as 30-year concessions, renewable unless the DGA proves non-use or harm to sustainability; those constituted before retain their perpetual character, without prejudice to certain forfeiture grounds. Priority of human consumption and the subsistence function, which always prevails. Reinforced obligation of effective use and of the lapsing and forfeiture grounds for non-use, requiring the capture and return works to be built. Strengthened DGA powers to manage scarcity, set the ecological flow, declare restriction and prohibition areas and require metering. Protection of indigenous peoples and communities, with differentiated treatment in several regularization and forfeiture rules.
OGC view
An idle right, without works or without up-to-date registration, is an asset at risk of forfeiture.
FEE AND FORFEITURE
Ecological flow, non-use fee and lapsing
Three mechanisms give effect to the reform and operate in a chain.
Minimum ecological flow. The water that must remain at the source to preserve the ecosystem. The DGA sets it under Article 129 bis 1 of the Water Code, as a limit on legal availability.
Non-use fee. Charged to a holder who does not make effective use of the resource for failing to build the capture or return works (Arts. 129 bis 4 et seq.). The reform raised it and scaled it up over time; if unpaid, it can end in a judicial auction of the right.
Forfeiture for non-use. The final step, when the holder does not build the works. The period is five years for consumptive rights and ten for non-consumptive ones, counted from publication of the resolution first including the right on the fee-subject list. For rights constituted before the reform that have not built the Article 129 bis 9 works, forfeiture of the not-effectively-used portion operates ten years after the law’s publication. The holder has 30 days to object; once remedies are exhausted, the DGA requests the Registrar to cancel the recording. Exceptions exist (rural sanitary services, agricultural and indigenous communities).
OGC view
Buying a never-used right inherits its fee and its forfeiture clock; check which list it appears on and whether it has works.
REGISTRY AND TRANSACTIONS
Registration, disclosure and transactions
The reform turned registration into an obligation with severe consequences. Rights constituted as of the publication date of Law No. 21,435 are subject to forfeiture if not recorded in the competent Registrar’s Water Property Registry and registered in the DGA’s Public Water Registry within the legal deadline. The original 18-month deadline was extended by Law No. 21,586 and further extended by Law No. 21,727 to April 6, 2027. Non-compliance can result in forfeiture by operation of law, subject to the same exceptions.
Added to this is the obligation under the fifteenth transitional article of the Water Code, granting five years from the publication of Law No. 21,435 to make a marginal annotation on the recording, evidencing registration in the Registry. That deadline also expires on April 6, 2027; until it is made, the Registrar cannot record transfers of ownership. Law No. 21,586 also introduced the title-perfection procedure under the DGA, to determine each right’s data and incorporate it into the Registry.
OGC view
The sanction can be loss of the right; audit your recordings and, in any purchase, require the right to be recorded, registered and with an up-to-date marginal annotation. Transactions on use rights The use right is transferable, and in closed basins purchase is the only practical route to secure water. The transfer is formalized by public deed, with the DGA resolution’s data (coordinates, flows and status of the capture point) and price, and must be recorded in the Water Property Registry; it may also be leased and pledged as security. Moving the capture point to another source or location requires prior DGA authorization. If the right comes from a users’ organization, verify the seller owes it nothing, on pain of having to pay it or risk the supply being cut off.
OGC view
Treating the purchase of water rights like that of real estate is the original mistake. Due diligence requires confirming, before paying, recording and registration in the Registry, classification, works, the non-use fee and forfeiture lists, debts to organizations and location relative to restriction or prohibition.
O R G A N I Z AT I O N S A N D S E C TO R S
Users’ organizations and sectoral relevance
OGC view
Identify early the organization managing the source and its financial situation; opposition from irrigators does not show up in the title. Sectoral relevance In mining in the arid north, securing continental water is a bottleneck that has pushed the sector toward desalination, with a special regime for miner’s water. Article 56 bis of the Water Code defines it as water the concessionaire finds in its exploration and exploitation work, and allows its use for operations, with an obligation to report it to the DGA within 90 calendar days of discovery (DGA Exempt Resolution No. 2,600 of 2022); it does not separate from the concession and is extinguished with it. In run-of-river hydropower, the right is the non-consumptive one, with a ten-year forfeiture period. In agriculture and irrigation, old rights, water communities and canal associations coexist with mandatory registration of numerous small holders. In real estate and sanitary projects, priority for human consumption favors drinking water. Green hydrogen, given its large electrolysis volumes, also depends on desalination.
DESALINATION
Desalination: Law No. 21,813
Desalination has become a central response to scarcity; by 2025 more than 30 desalination plants were operating in Chile, with mining as the main consumer. Previously it was governed by the general rules on maritime concessions, because the Water Code governs continental, not maritime, waters.
That framework changed with Law No. 21,813 on the use of seawater for desalination, published on May 12, 2026, which creates a special regime of maritime concessions and allocations, a National Desalination Strategy and rules on enforcement, sanctions, renewal, lapsing and termination. For ongoing projects, review the transitional rules and their effective dates.
OGC view
The sector defines the water strategy before any clause; mining and green hydrogen depend on desalination under Law No. 21,813. Would your project’s water rights survive due diligence? SCHEDULE A MEETING Talk to Cubillos Lama.
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This content is for informational purposes only and does not constitute legal advice. Before making investment decisions, we recommend obtaining advice on your specific situation.
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