Spain's Rental Reforms: Implications for Tenants and Unresolved Issues

The Spanish government has introduced a significant housing reform through two royal decree-laws aimed at altering rental regulations. The first, Royal Decree-Law 26/2026, was officially published in the State Gazette on Wednesday and is set to take effect on Thursday, October 1. The second decree, which proposes automatic contract renewals and potential compensation of 12 months' rent, has been approved by the Council of Ministers but has yet to be published in the Gazette and still lacks parliamentary support for validation.

A political catalyst for these changes was the eviction of 87-year-old María del Carmen Abascal Martín on September 23 in Madrid, after residing in her Retiro district home for 70 years. Her eviction was highlighted in the decree as emblematic of the housing crisis, sparking protests including a camp-out in Puerta del Sol and a large demonstration days later.

New Regulations Effective October 1

Starting October 1, the RDL 26/2026 will address temporary rentals and room rentals, two common methods used to circumvent traditional rental protections. Temporary rental agreements will require a genuine, justified, and verifiable reason for the tenant's temporary need, with the burden of proof on the landlord. These contracts must last more than 31 days but generally not exceed 12 months. If no valid reason is provided or contracts are repeatedly renewed with the same parties for the same property, the agreement will be regarded as a standard residential lease from the outset.

For room rentals, the total rent cannot exceed the cost of renting the entire property. In areas with strained residential markets, both temporary and room rentals must comply with rent caps set for those regions.

The decree also introduces an extraordinary extension of up to two years—requested by the tenant, on an annual basis—for contracts whose mandatory, tacit, or implied renewal periods end before December 31, 2028, provided the tenant is current with payments and has been for the past eight months. Additionally, rent updates are capped until December 31, 2027.

Pending Measures: The Second Decree

The second decree-law, approved by the Council of Ministers on Tuesday, faces a delay in publication due to technical reasons: it is interconnected with the first decree, which needed to be in effect first. According to El País, who accessed the text, this decree amends Article 10 of the Urban Leases Law to introduce automatic renewals: after the minimum lease period—five years for individual landlords, seven for corporate landlords—the contract renews indefinitely unless either party expresses a desire not to renew.

Landlords must provide at least six months' notice if they choose not to renew, compared to the two months' notice required from tenants. Should a landlord opt not to renew without a justified reason, they must compensate the tenant with at least 12 months' rent based on the state's price reference system, and this cannot be less than one month's rent per year of residence.

Exemptions exist, such as if the landlord needs the property for personal use or for a family member up to the second degree; if the tenant does not occupy the property for more than six months a year without justification; if the tenant has another suitable residence in the same municipality; if a new contract is signed at a regulated price; or if the landlord can demonstrate vulnerability.

This measure, demanded by the political party Sumar, is opposed by Junts and the PNV, who view it as a form of expropriation. José Ramón Zurdo, an expert from the Rental Negotiation Agency, warned that if validated, "the supply post-December 31, 2028, would shrink to a third of its current level."

Both decrees require validation by the Congress in an extraordinary session scheduled for Friday, October 2, and their approval remains uncertain.