The Water Rights Market: From Title Transfers to Administrative Reallocation

The reform to Mexico's National Waters Law (Ley de Aguas Nacionales), published on December 11, 2025, substantially changed how rights to use national waters can change ownership.

The concession transfer regime was replaced by an administrative reallocation scheme, under which released volumes are pooled into the National Waters Reserve Fund and their assignment rests with the National Water Commission (CONAGUA) and an interagency committee.

The change goes well beyond a shift in terminology: it marks the transition from a mechanism in which private parties could agree to transfer a title — subject to government authorization — toward a model in which the public administration takes on a central role in reallocating available volumes.

From Title Transfers to Reallocation

Under the previous regime of the National Waters Law, a concession title could be transferred definitively, in whole or in part, by agreement between the parties and with CONAGUA's authorization.

The 2025 reform eliminated this scheme and introduced the National Waters Reserve Fund, made up of volumes derived, among other cases, from the extinction of concession titles, voluntary transfers, the sale of properties tied to concessions, corporate mergers and spin-offs, and inheritance rights.

Reallocation thus becomes the pathway for accessing certain previously concessioned volumes that form part of the Fund. The legislation grants preferential rights in three specific cases:

• Transfer of a property associated with a concession title
• Corporate merger or spin-off
• Inheritance rights

In these procedures, CONAGUA must give priority to uses that benefit the human right to water, food security, and national development, under criteria reviewed by a committee made up of five federal agencies.

What Was the Reform Meant to Fix?

One of the arguments behind the legislative change was the concentration of water rights and the inequalities generated under the previous regime.

Various studies show that the water rights market operated with significant problems of weak institutions, lack of transparency, and concentration.

For example, Gómez-Arias and Moctezuma documented that 3,304 large private users came to control 22.3% of the country's concessioned volume. Other analyses have likewise noted that the absence of clear limits on accumulation, together with features of the management model, favored significant concentrations of rights.

However, replacing the transfer regime does not necessarily eliminate the problems it was meant to solve.

Three Risks of the New Reallocation Scheme

The new model presents at least three points of conflict that will be decisive for how it operates.

1. Lack of Implementing Regulations

Operation of the Reserve Fund depends on implementing regulations that define concepts and criteria relevant to reallocation, including broad notions such as «responsible water management» or uses that benefit «national development».

2. Uncertainty for Transactions Currently Underway

The reform established that reallocation would take effect 180 calendar days after the decree's publication. However, once that deadline had passed, the implementing regulations needed to make the mechanism fully operational had still not been issued.

This creates a particularly significant practical consequence: there are no clear rules for formalizing certain changes of ownership arising from property sales, corporate mergers and spin-offs, or inheritance, a situation that has already caused transactions to stall.

3. The Risk of Shifting Discretion

The reform does not necessarily eliminate the discretion that existed under the previous system either. To a large extent, it shifts that discretion to an interagency committee tasked with evaluating concepts such as «national development» and «food security».

Without sufficiently defined and verifiable regulatory criteria, there is a risk of replacing the discretion of private parties with the discretion of the authority.

The Challenge: Transparency and Legal Certainty

The shift toward administrative reallocation seeks to address real problems of concentration and inequality in access to water. However, the new model will not, on its own, resolve the opacity and lack of objective criteria identified under the previous regime.

For the new scheme to achieve its objectives, it will be essential to have clear implementing regulations, objective criteria for the committee's decisions, and transparency mechanisms that make it possible to track the volumes entering and leaving the Reserve Fund.

Otherwise, reallocation could reproduce the very problem it seeks to solve: an allocation of water shaped by discretionary criteria, now concentrated in the administrative authority.

About the Author

Karime Eugenia Vázquez Hernández is a Senior Associate at Del Razo & Rábago Consultores Ambientales. She is an attorney specializing in Environmental, Administrative, and Regulatory Law, with eleven years of experience advising companies and projects subject to environmental regulation. Her practice focuses on regulatory compliance, permits and concessions, administrative sanction proceedings, and administrative litigation. She holds a law degree from the Instituto Tecnológico Autónomo de México (ITAM) and is currently pursuing a Master's in Administrative Law at Universidad Panamericana.

Editorial Note

This article is an adaptation for the Del Razo & Rábago blog of the text originally published in the journal Derecho Ambiental y Ecología, issue 99, May–August 2026.