2005 Idaho Code - 41-725 — "ENCUMBRANCE" DEFINED

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 7
                                 INVESTMENTS
    41-725.  "ENCUMBRANCE" DEFINED. (1) Real property shall not be deemed to
be encumbered within the meaning of section 41-721 by reason of the existence
of instruments reserving mineral, oil, timber or similar rights, rights of
way, sewer rights, rights in walls, nor by reason of any liens for taxes or
assessments not yet due, or on account of liens not delinquent for community
recreational facilities, or for the maintenance of community facilities, nor
by reason of building restrictions or other restrictive covenants common to
the community in which the property is located, nor by liens for service and
maintenance of water rights where not delinquent, nor when such real property
is subject to lease under which rents or profits are reserved to the owner if
in any event the security for the loan or investment is a first lien upon the
real property.
    (2)  If under any of the exceptions set forth in subsection (1) of this
section there is any sum owing but not due or delinquent, the total amount of
such sum shall be deducted from the amount which otherwise might be loaned on
the property. The value of any mineral, oil, timber or similar right reserved
shall not be included in the fair value of the property.