Losing a job doesn’t change an owner’s responsibilities, but it also doesn’t mean your group has to start figuring out what to do from scratch.
Joynt Pro creates a financial structure around the property from the beginning, with defined monthly contributions, financial buffers chosen by your group, automated payments, and a process to follow if an owner eventually can’t meet their obligations.
The goal is to give the property and the people who own it together more stability when someone’s personal financial circumstances change.
Everyone knows what they’re responsible for.
One of the simplest protections is knowing what owning the property is expected to cost each person.
The Joynt Operating Agreement establishes a process for creating an operating budget based on required property expenses, called Mandatory Expenditures in the agreement. These include mortgage payments, if applicable, taxes, insurance, necessary maintenance and repairs, HOA assessments, management costs, utilities, and other required expenses.
Those costs are allocated among the owners according to the Operating Agreement. Most are generally allocated according to each owner’s Percentage Interest, while mortgage payments, if applicable, can be allocated according to each owner’s Shared Debt Percentage.
The budget can also account for anticipated rental income if the group has chosen to make the property available for rentals.
When an owner’s anticipated share of expenses exceeds their share of anticipated rental income, the budget establishes a Regular Monthly Assessment due on the first day of each month.
From the Joynt Operating Agreement
“The Management Coordinator shall create a Draft Operating Budget from time to time based on the Management Coordinator’s estimate of: (i) the annual cost of each of the Mandatory Expenditures; and (ii) the annual rental income (if the Members have decided to make the Property available for rental use pursuant to Subsection 2.1D(4)).”
Instead of figuring out how to cover the property’s expenses every time a bill arrives, the group starts with a defined process for budgeting and funding them.
The property has a financial buffer built into the plan.
The Operating Agreement doesn’t assume that the property should operate without money available for upcoming expenses.
Each ownership interest is required to maintain a minimum balance in the shared operating account for the property. Your group determines that minimum when establishing the Operating Agreement, and changing it later requires Unanimous Approval.
If an ownership interest’s balance remains below its required minimum for 45 continuous days, a Minimum Balance Assessment is issued in an amount intended to bring the balance back to 110% of its required minimum.
From the Joynt Operating Agreement
“Each Membership Interest shall maintain a minimum balance in the Company Operating Account. The amount of such minimum balance shall be determined by the Members when they first establish this Agreement, and thereafter may be changed only with Unanimous Approval.”
The agreement uses “Company Operating Account” to mean the shared deposit account maintained for the property-owning LLC.
This financial buffer is there to help keep funds available for the property’s ongoing expenses. It isn’t a personal hardship fund for an individual owner, and it doesn’t eliminate anyone’s obligation to pay what they owe.
But it does mean the group establishes a financial cushion instead of leaving the property without one.
Owners agree to maintain a financial buffer of their own.
The Operating Agreement also creates a safeguard at the individual-owner level.
Each owner agrees to maintain a minimum balance in a bank or brokerage account and keep the necessary instructions and authorizations in place for Regular Monthly Assessments and Minimum Balance Assessments to be paid automatically.
Your group determines the required minimum balance when establishing the Operating Agreement. Changing that amount later requires Unanimous Approval.
From the Joynt Operating Agreement
“Each Member hereby agrees: (i) that Joynt shall collect Regular Monthly Assessments and Minimum Balance Assessments on behalf of the Company and deposit amounts collected in a Company Operating Account; (ii) to at all times maintain a deposit account at a licensed bank or brokerage, and to keep in such account a minimum balance; and (iii) to maintain in effect all necessary instructions and authorizations under which such bank or brokerage automatically pays each Regular Monthly Assessment and Minimum Balance Assessment by its stated due date upon receipt of a bill from Joynt.”
Here, “Company” means the property-owning LLC.
This creates an additional layer of financial preparation if someone’s income suddenly changes, while keeping their responsibilities to the property in place.
Shared finances don’t have to become another thing to manage during a stressful time.
Joynt is built directly into the financial process established by the Operating Agreement.
The agreement provides for Joynt to collect Regular Monthly Assessments and Minimum Balance Assessments on behalf of the property-owning LLC and deposit those funds into its operating account.
Owners also agree to maintain the necessary instructions and authorizations for those payments to happen automatically.
That means the group has an established system for collecting these regular property contributions instead of relying on one owner to continually remind everyone to transfer money.
When someone is dealing with a personal financial setback, the normal financial responsibilities of the property can continue within the system the group already established.
What if the setback lasts longer than expected?
A job loss might be temporary. Or it might lead an owner to realize that their financial situation has changed more permanently.
The important thing is that the group doesn’t have to decide what the rules should be while that’s happening.
An owner’s financial obligations under the Operating Agreement continue. If they begin missing required payments, the agreement has a defined process for addressing the unpaid obligation.
And importantly, a missed payment doesn’t automatically put someone in Default.
Before the agreement’s Default remedies become available, a Notice of Possible Enforcement Action must be posted explaining the alleged violation, what needs to be done to cure it, and the proposed enforcement action.
The owner then has 14 calendar days from the date the notice is posted to respond as required by the agreement.
From the Joynt Operating Agreement
“Within 14 calendar days of such posting, the accused Member must provide to Joynt a Notice of Alleged Violation Response, including verifiable proof, that the accused Member has either: (i) performed each of the Cure actions identified in the Notice of Alleged Violation Response; or (ii) paid the full amount (if any) that the Notice of Alleged Violation Response alleges is owed and initiated court action or, if Subsection 7.4B is in effect, initiated arbitration.”
There is an important rule for financial obligations: an owner can’t withhold a required payment while disputing it.
If the owner believes an amount is incorrect, the agreement requires them to pay the outstanding balance under protest before challenging it through the applicable dispute process.
If the owner doesn’t satisfy the agreement’s requirements within the 14-day period, they are considered in Default beginning on the 15th calendar day after the Notice of Possible Enforcement Action is posted.
So there is a defined process between experiencing a financial setback and reaching the agreement’s more serious Default remedies.
What if they realize they can no longer afford to own the property?
They don’t necessarily have to wait until missed payments become a Default.
If an owner’s financial circumstances have changed enough that ownership no longer makes sense for them, the Operating Agreement provides a process for voluntarily selling their ownership interest.
An owner can look for a buyer. Once they have an offer they wish to accept, the agreement provides a defined resale process that gives the other owners an opportunity to purchase the interest at the offered price.
The agreement also includes protections around a prospective new owner’s financial qualifications and, when applicable, lender consent and other transfer requirements.
That creates another possible path forward: an owner can choose to sell their share rather than allowing a temporary financial problem to become a larger one.
Learn more about what happens when someone wants out →
And if someone does stop paying?
That’s where the agreement’s stronger protections come in.
If an owner fails to meet their obligations and ultimately reaches Default under the Operating Agreement, the agreement establishes what can happen next.
Upon Default, the owner automatically loses their usage rights while the Default continues.
With Unanimous Approval, another owner may also cover money owed by the Defaulting Member as a loan. The agreement establishes how that loan accrues interest and how the lending owner can ultimately be repaid.
The Operating Agreement also includes a Post-Default Purchase Option that can ultimately allow another owner or group of owners to purchase the Defaulting Member’s ownership interest under the process and pricing rules established by the agreement.
Those protections are covered in detail separately.
Learn more about what happens if someone stops paying →
Why prepare for this before you buy?
Because financial circumstances change.
Someone can lose a job, change careers, start a business, take time away from work, or experience another unexpected change in income.
You don’t need to predict which one will happen.
You need an ownership structure that already accounts for the possibility that something might.
With Joynt Pro, the group establishes financial responsibilities and safeguards while everyone is on the same page. If someone’s circumstances change later, the group already knows what’s expected and what options are available.
Life can change. Your ownership plan can be ready for it.
A job loss doesn’t automatically change someone’s ownership or financial responsibilities.
Joynt Pro helps your group prepare for financial changes with predictable contributions, financial buffers chosen by your group, automated payments, a voluntary exit process, and clear steps for what happens if someone can no longer meet their obligations.
Instead of making difficult financial decisions from scratch during an already stressful moment, your group starts with a plan everyone agreed to from the beginning.
