The declaration may require that all or a specified number or percentage of the mortgagees or beneficiaries of deeds of trust 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 may not operate to:

1. (1) deny or delegate control over the general administrative affairs of the association by the unit owners or the board; or

2. (2) prevent the association or the board from:

   1. (A) commencing, intervening in, or settling any litigation or proceeding; or
   2. (B) receiving and distributing insurance proceeds under Section 82.111.

Added by Acts 1993, 73rd Leg., ch. 244, Sec. 1, eff. Jan. 1, 1994.