Rights of secured lenders

The declaration may require that all or a specified number or percentage of the mortgagees encumbering the units approve specified actions of the unit owners or the association as a condition to the effectiveness of those actions, but a requirement for approval shall not operate to: (1) Deny or delegate control over the general administrative affairs of the association by the unit owners or the executive board; or (2) Prevent the association or the executive board from commencing, intervening in, or settling any litigation or proceeding, or receiving and distributing any insurance proceeds except as provided in KRS 381.9187.