What is the Cash Reserve and how does it work?

At Joynt, our goal is to make co-ownership simple, transparent, and secure for everyone involved. A key component of this security is the Cash Reserve, a shared pool of funds that acts as a financial safety net for your property.

This article explains what the Cash Reserve is, how it’s calculated, and how it protects you and your fellow co-owners.

What is the Cash Reserve?

The Cash Reserve is a required minimum balance that all co-owners collectively maintain in the property’s dedicated business bank account, which we call the Company Operating Account.

Think of it as a financial cushion for your property. Its purpose is to ensure there are always sufficient funds available to cover essential, shared property expenses on time. This includes:

Monthly mortgage payments
Property taxes and insurance
Utility bills
Unexpected repairs or emergency costs

By having this reserve, all co-owners are protected from the risk of late payments, which could lead to penalty fees, service interruptions, or even damage to everyone's credit score. It also ensures that if one co-owner faces a temporary, unexpected financial issue, the property's essential bills are still paid, preventing a default.

How is the Cash Reserve Amount Calculated?

The total Cash Reserve is determined by each co-owner’s individual monthly contribution. Your required portion of the reserve is calculated as three times your Regular Monthly Assessment.

The Regular Monthly Assessment is your share of the property's predictable monthly costs (like the mortgage, taxes, insurance, etc.).

Example:

If your Regular Monthly Assessment is $500, your required portion of the Cash Reserve is $1,500 ($500 x 3).
If you co-own with one other person who also has a $500 monthly assessment, the total Cash Reserve in the Company Operating Account would be $3,000.

This amount is held in the shared Company Operating Account, ready to be used for scheduled and emergency payments.

What Happens if the 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.

An Important Distinction: Your Personal Account Buffer

To ensure the entire system runs smoothly, your Operating Agreement requires a second, separate financial safeguard.

In addition to maintaining the Cash Reserve in the shared Company Operating Account, each co-owner must also maintain a sufficient balance in their own personal bank account—the one linked to Joynt for autopayments.

Specifically, you agree to keep a balance in your personal account equal to at least three of your Regular Monthly Assessments.

Note that Joynt does not monitor or validate that you maintain this balance in your personal account; you are solely responsible for maintaining the required balance.

Why the two requirements?

The Cash Reserve (in the Company Operating Account): Protects the property and all co-owners by ensuring funds are available for shared bills.
Your Personal Account Buffer: Protects you by ensuring your automatic payments for your Regular Monthly Assessment (and any other assessments) clear successfully without being declined for insufficient funds.

This two-part structure creates a robust financial foundation, preventing payment failures at both the individual and group level and making the co-ownership experience predictable and secure for all. If you have any questions about your Cash Reserve or how payments are managed, please visit our help center or contact the Joynt support team.