SAN JOSE (KCBS) – When Samantha James signed a lease on a San Jose apartment in the spring of 2011, she had no idea the duplex in College Park had been in foreclosure for about two years.

“It had been scheduled for auctions several times,” she said, all postponed.

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When confronted, James’ landlord revealed he had been trying unsuccessfully to get a loan modification. A new owner would have the right to cancel the lease with just three months notice.

KCBS’ Margie Shafer Reports:

“It was a very emotional and overwhelming process for me. I didn’t know anything about real estate law,” James said. “I had to become an expert in a matter of weeks to figure out what my rights were.”

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Starting next year, landlords in California will be required to disclose in writing whether a rental property is in foreclosure before signing a lease. The bill signed Tuesday by the governor was a winning entry Palo Alto state Senator Joe Simitian’s “There Oughta Be A Law” contest.

James learned that she could have entered a month-to-month lease or negotiated a rent reduction. Instead she opted to move, distrustful of a landlord who had not been transparent.

“Somebody should know this kind of information before they’re putting a deposit down, investing their time and money in moving somewhere and becoming comfortable and trying to live,” she said.

The new law allows tenants to void the lease if foreclosure proceedings have not been disclosed, and sets forth other penalties for the landlord.

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