Legal Definitions - public-records doctrine

The public-records doctrine is a fundamental legal principle, applied in many jurisdictions, that allows individuals and organizations involved in real estate transactions to rely on the information contained within official government property records. This doctrine means that when someone is buying, selling, or lending money against real estate, they can generally trust what the public records show regarding ownership, liens, and other interests. They are typically not obligated to conduct further investigations to uncover any hidden or unrecorded claims that have not been officially filed with the appropriate government authority.

Here are a few examples illustrating how the public-records doctrine works:

• Scenario 1: Purchasing a Home

  Imagine Maria is buying a house from John. Before finalizing the purchase, Maria's attorney conducts a thorough title search, reviewing all public records related to the property. The records show that John is the sole owner and there are no outstanding mortgages or easements. Unbeknownst to Maria, John had a private, unrecorded agreement with his neighbor, allowing the neighbor to use a portion of John's backyard for a garden. Since this agreement was never officially recorded, Maria had no way of knowing about it by checking public records.

  How it illustrates the doctrine: Under the public-records doctrine, Maria can rely on the clean title shown in the public records. She is not bound by John's unrecorded agreement with his neighbor because she had no notice of it from the official records. Her ownership of the property would typically be free from this unrecorded claim.

• Scenario 2: Commercial Property Loan

  A small business owner, David, seeks a loan from Capital Bank to expand his operations, offering his commercial building as collateral. Capital Bank performs a comprehensive review of the public land records for David's property. The records indicate that David owns the property outright and there are no existing mortgages or liens. What Capital Bank doesn't know is that David previously borrowed money from a private individual, who neglected to record their lien against the property in the public records.

  How it illustrates the doctrine: Because the private individual's lien was not recorded, Capital Bank, relying on the public records, can proceed with the loan, assuming its mortgage will be the primary claim against the property. The public-records doctrine protects Capital Bank, meaning their properly recorded mortgage would generally take priority over the earlier, unrecorded private lien, even though the private loan was made first.