The Royal Decree-law 27/2026, which was approved on September 29 and published in the Official State Gazette (BOE) on Thursday as provision number BOE-A-2026-20385, comes into effect this Friday, October 2. This decree sets forth new rules for extending and compensating rental contracts for habitual residences in Spain.
This is the second of two housing decrees passed by the Council of Ministers during the same session. The first, RDL 26/2026, took effect on October 1 and covers temporary and room rentals. The publication of the second was delayed by a day because it amends an article from the first, which needed to be in force beforehand. The new rental measures, altering tenant regulations, were previewed on September 30 when the second decree was still pending release.
Changes in Standard Residential Contracts
The decree revises Article 10 of the Urban Leases Act, establishing contract continuation as the default rule. As per the BOE text, "contract continuation becomes standard, and termination is a decided action by the landlord, requiring specific timing and sufficient notice."
After the minimum term of five years for individual landlords or seven years for corporate landlords, contracts automatically renew for the same duration unless one party states their intent not to renew, as dictated by law.
The landlord's notice period for this decision extends from four to six months, while the tenant's notice period remains two months.
Eligibility for 12-Month Compensation
If a landlord validly communicates their intent not to renew a contract and no exceptions as per the law apply, they must compensate the tenant with at least 12 months' rent for a similar property.
The calculation is ideally aligned with the national rental price reference system and cannot fall below one month's rent per year of tenant residence. In some cases, compensation may exceed 12 months, and payment is due upon key handover.
Exceptions to Compensation
Compensation is not automatic or universal. The decree details several scenarios where landlords can terminate contracts without paying compensation.
For instance, if the landlord, as an individual, needs the property for personal use, for certain family members up to the second degree of kinship or adoption, or for their spouse in cases of separation, divorce, or annulment, compensation is exempt.
Moreover, if the property isn’t occupied within the stipulated time, barring force majeure, the former tenant could regain the right to claim compensation.
Compensation is also not applicable if the tenant hasn’t occupied the property for more than six months in the preceding year before notification, except in legally justified cases like health, employment, education, or family care issues.
Another exception occurs when the tenant has another suitable residence in the same municipality.
The law excludes compensation if a new agreement is made or if the tenant rejects a legitimate offer to continue residing in the property under a new contract meeting legal terms.
The decree also considers certain landlord vulnerabilities, requiring proof as per the norm.
Additionally, the right to compensation doesn't arise if the tenant qualifies for a mandatory legal extension of the lease, even if they don't request it.
Impact on Existing Contracts
The decree's sole transitional provision outlines specific rules for current contracts when the reform takes effect.
For expirations affected by the new rules, if less than six months remain until contract end upon the reform's enforcement, landlords can express non-renewal intentions with at least four months' notice.
Valid non-renewal notices issued before the new rule's enforcement remain effective and are governed by the decree's transitional regime, without automatically granting rights to new compensation.
The law states that selling the property doesn't nullify the tenant's potential compensation rights. If the buyer assumes the landlord's position, they inherit the obligations unless legal exceptions apply.
Implementation and Parliamentary Approval
The decree takes effect this Friday, October 2, but its continuation hinges on parliamentary approval.
The Constitution mandates that decrees must undergo parliamentary debate and voting within 30 days of promulgation. The extraordinary session for this vote was set for the decree's effective date.
Approval was uncertain due to declared stances from various parliamentary groups, including Junts and PNV.
José Ramón Zurdo, from the Rental Negotiation Agency, warned that if approved, "the market supply post-December 31, 2028, would shrink to a third of its current size." This is an expert forecast on the measure's potential impact on the rental market.
Understanding Spain's New Rental Decree
What is the main change introduced by the new rental decree in Spain?
The decree makes contract continuation the default rule, requiring landlords to explicitly decide and provide adequate notice if they wish to terminate a rental agreement.
Who is eligible for the 12-month rental compensation?
Tenants are eligible if a landlord decides not to renew the lease and no legal exceptions apply. Compensation is based on the rental price reference system.
Are there any exceptions to receiving rental compensation?
Yes, exceptions include situations where the landlord needs the property for personal use, where the tenant has not occupied the property for the majority of the previous year, or if the tenant has another suitable residence in the same area.