What is a "True-Up" and how does it work?
A "True-Up" is a Minimum Balance Assessment that triggers if the Cash Reserve balance drops too low
Joynt's system continuously monitors the balance in the Company Operating Account. We understand that balances can fluctuate. However, to ensure the property remains financially secure, the Operating Agreement includes a provision for when an owner’s portion of the reserve remains too low for an extended period.
Here’s how it works:
- 45-Day Grace Period: If your portion of the account balance falls below your required minimum (your 3x monthly assessment) and stays there for 45 consecutive days, the system will trigger a corrective action.
- Minimum Balance Assessment: On the 45th day, a Minimum Balance Assessment will be automatically issued. This is a one-time charge designed to restore your portion of the reserve to a safe level.
- Restoring to 110%: The assessment amount will be calculated to bring your balance up to 110% of your required minimum. The extra 10% serves as a small buffer to prevent the balance from immediately dropping below the minimum again.
- Using our example: If your required reserve is $1,500, the Minimum Balance Assessment would bring your portion of the funds up to $1,650 ($1,500 x 1.10).
- 15-Day Notice: You will receive a notification and a statement on your Joynt portal at least 15 calendar days before the assessment is due, detailing the amount and the calculations. This assessment is automatic and binding as outlined in your Operating Agreement.
