§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.