The time-share instrument may require that all or a specified number or percentage of holders of mortgages or equivalent security interests encumbering units or time shares approve specified actions of the unit owners, time-share owners, the developer or the managing entity as a condition to the effectiveness of those actions, but no requirement for approval may do any of the following:
(1) CONTROL OVER ADMINISTRATION. Deny or delegate control over the general administrative affairs of an association by the unit owners or time-share owners, or their elected representatives.
(2) INVOLVEMENT IN LITIGATION. Prevent an association from commencing, intervening in or settling any litigation or proceeding or receiving and distributing insurance proceeds under s. 707.35.