§1141.16. Rights of secured parties

            A. The declaration may require that specified actions of the lot owners or the association shall be approved by creditors who hold security rights in the lots or who have extended credit to the association, but no requirement for approval may operate to do any of the following:

            (1) Deny or delegate control over the general administrative affairs of the association by the lot owners or the board of directors.

            (2) Control the establishment or imposition of assessments except as provided in Subsection C of this Section.

            (3) Prevent the association or the board of directors from commencing, intervening in, or settling any litigation or proceeding.

            (4) Prevent the association from receiving and distributing any insurance proceeds to make necessary repairs as a result of a casualty.

            B. A lender who has extended credit to an association secured by a security right to the income of the association or a security right in the common areas or limited common areas may enforce the security right in accordance with its terms, subject to the requirements of this Part or other provisions of law. Requirements that the association deposit with the lender the association's periodic income in which the lender holds a security right do not violate Subsection A of this Section.

            C. If approved by an association in accordance with R.S. 9:1141.28, the holder of a security right may require that assessments shall not be decreased without its approval.

            Acts 2024, No. 158, §2, eff. Jan. 1, 2025.