§431:6-308  Encumbrance defined.  (a) Real property shall not be deemed to be encumbered within the meaning ofsection 431:6-306 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 accountof liens not delinquent for community recreational facilities or for themaintenance of community facilities, nor by reason of building restrictions orother restrictive covenants common to the community in which the property islocated, nor by liens for service and maintenance of water rights where notdelinquent, nor when such real property is subject to lease under which rentsor profits are reserved to the owner if in any event the security for the loanor investment is a first lien upon the real property.

(b)  If under any of the exceptions set forthin subsection (a) there is any sum owing but not due or delinquent, the totalamount of such sum shall be deducted from the amount which otherwise might beloaned on the property.

The value of any mineral, oil, timber, orsimilar right reserved shall not be included in the fair value of the property.[L 1987, c 347, pt of §2]