Business professionals often deal with sophisticated legal concepts. One such concept that often arises in business is the phrase “remainder subject to open,” or “RSO.” RSO is a concept used in the law of real estate ownership.
In general, RSO means that a property is divided into two portions. The first portion is a currently existing portion whose ownership is known. The second portion is a future portion that is owned by someone else, but the exact details of the ownership and boundaries are not yet known.
For example, if a property is sold and the boundaries of the property are determined, but part of the property is not included in the sale, it is said that the excluded portion is “remainder subject to open.” That means that although the parcel of the land is owned by a different party, the exact boundaries of that land have not yet been determined.
Understanding the Scope of RSO
When dealing with RSO, it is important to understand the scope of the designation. RSO means that the exact boundaries and ownership of the future portion are unknown. It does not necessarily mean that the existing portion is being sold with the future portion remaining in the hands of the seller.
For example, if a property is sold, and there is an RSO designation, the current owner may not retain ownership of the future portion of the property. The exact ownership of the future portion could be determined at a later date when the boundaries are finalized.
The Purpose of RSO
RSO is used to keep the boundaries of the current portion of the property clear while maintaining a holding period for the future portion. This ensures that the boundaries of a property are well-defined and allows the parties involved to know exactly what is owned by each of them.
It is important to remember that RSO is an arrangement between the parties involved in the real estate deal and is not necessarily enforced by the court or other government entities. The parties involved must agree to the arrangement and are solely responsible for determining the boundaries of the property.
The Benefits of RSO
RSO can be an effective way for business professionals to ensure that their property interests are well protected and that their ownership rights are properly established. RSO can also be beneficial for ensuring that property rights are divided clearly between the parties involved, especially if there is any dispute over ownership.
In addition, RSO can be used as a way to provide protection for both parties by keeping any future division of the property an open question until the boundaries have been finalized.
Conclusion
In conclusion, “remainder subject to open” is an important concept for business professionals to understand when dealing with real estate ownership. Though RSO is not necessarily enforced by the court, it can serve as an effective way to ensure that property rights are separated between the parties involved and that any future divisions of the property remain open until the boundaries are finalized.
By understanding the concept of RSO, business professionals can better protect their interests and ensure that their ownership rights are properly established.