Key data
| Regulation | Royal Decree-Law 28/2026, of October 6, adopting urgent measures to strengthen the stability of habitual residence rental contracts |
|---|---|
| Publication | October 7, 2026 |
| Entry into force | October 7, 2026 |
| Affected parties | Landlords and tenants of habitual residence properties in rental throughout Spain |
| Modified regulation | Article 10 of the Urban Leases Law (LAU) |
| Category | Real Estate |
| Year | 2026 |
If you own a rental property or manage a real estate portfolio, this regulation changes the rules of the game immediately. The Royal Decree-Law 28/2026 modifies article 10 of the LAU to make automatic renewal the general rule, not the exception. It is no longer enough not to renew: now you must justify it, give notice beforehand, and in many cases, pay compensation.
What does this regulation establish?
Royal Decree-Law 28/2026 modifies article 10 of the LAU to establish successive automatic renewal as the general rule in habitual residence rental contracts, once the minimum legal period is exceeded. Below are the specific changes compared to the previous situation:
| Aspect | Before (previous regime) | From 07/10/2026 |
|---|---|---|
| Renewal upon contract expiration | Annual renewal, not automatic as a general rule | Automatic successive renewal as general rule |
| Notice of non-renewal by landlord | 4 months' notice | 6 months' notice |
| Compensation to tenant if not renewed | Not provided as a general rule | Mandatory, calculated on the reference value of the property and length of residence |
| Minimum period (individual landlord) | 5 years | 5 years (maintained) |
| Minimum period (legal entity landlord) | 7 years | 7 years (maintained) |
Compensation does not apply when the landlord proves one of the following justified grounds:
- Need for the property by the landlord or their family members.
- Lack of effective residence of the tenant in the property.
- Availability to the tenant of another suitable property for their use.
Additionally, extraordinary renewals for vulnerability and in tight market areas are maintained, with preferential character and not cumulative with other renewals. Contract clauses that worsen the conditions of the original contract for the tenant are null and void.
The transitional regime limits application to expirations after entry into force, to prevent non-renewal communications already sent before October 7, 2026 from becoming retroactively ineffective.
Economic and operational impact
For landlords, the impact is twofold: operational (more notice time, greater planning) and economic (direct cost of compensation if non-renewal is not justified).
Compensation is calculated on the cadastral reference value of the property and the length of the tenant's residence. The longer the tenant has lived there and the higher the property value, the greater the compensation. This makes the decision not to renew an explicit economic cost decision that must be budgeted.
For investors and real estate portfolio managers with legal entities as landlords, the 7-year minimum period already existed, but now exit at expiration also requires compensation unless justified grounds exist. This directly affects the valuation of rental portfolios and business models based on tenant rotation.
For tenants, the regulation represents a substantial improvement in stability: renewal is automatic by default, the landlord's notice period increases from 4 to 6 months, and they have the right to economic compensation if the landlord does not justify non-renewal.
Who does it affect?
- Individual landlords with habitual residence rental properties whose contract exceeds 5 years.
- Legal entity landlords (patrimonial companies, real estate investment funds, REITs) with contracts exceeding 7 years.
- Real estate portfolio managers administering residential rental portfolios.
- Habitual residence tenants throughout Spain, whose contractual stability is strengthened.
- Legal and real estate advisors managing rental contracts and who must review existing clauses.
- Developers and funds with residential assets in operation in tight market areas.
Practical example
An individual landlord has a property rented for 6 years. The contract expired a year ago and has been renewing. They decide they want to recover the property to sell it to a third party (not for their own use or family members).
Under the new regime:
- They must notify the tenant with at least 6 months' notice (previously 4 months was sufficient).
- Since the reason is not one of the justified grounds (own need, lack of effective residence of the tenant, or availability of another suitable property for the tenant), they must pay compensation calculated on the reference value of the property and the length of the tenant's residence.
- If the landlord does not notify with 6 months' notice or does not pay the compensation, the contract renews automatically.
If, instead, the landlord needs the property for their son to live in, they prove that justified ground and are exempt from paying compensation, although they remain obligated to give 6 months' notice.
What should landlords and tenants do now?
- Review all active rental contracts to identify which have exceeded the minimum period (5 years for individuals, 7 for legal entities) and are already in automatic renewal regime.
- Verify if there are pending non-renewal communications sent before October 7, 2026: the transitional regime limits application to expirations after entry into force.
- Update internal notice procedures: the period increases from 4 to 6 months. Any non-renewal communication sent with less than 6 months' notice will be ineffective.
- Calculate potential compensation costs before deciding not to renew: consult the cadastral reference value of the property and the tenant's length of residence to estimate the amount.
- Document justified grounds if you will claim own need or family members' need, lack of effective residence of the tenant, or availability of another suitable property, to be exempt from compensation.
- Review existing contract clauses: those that worsen the conditions of the original contract for the tenant are null. Eliminating them avoids litigation.
- Tenants should know their right to automatic renewal and compensation, and keep documentation proving their effective residence in the property.
Frequently asked questions
How much time does the landlord have to notify if they do not want to renew the rental contract?
From October 7, 2026, the landlord must notify the tenant of their decision not to renew with a minimum of 6 months' notice before expiration. Before this regulation, the period was 4 months. If this period is not respected, the contract renews automatically.
When is automatic renewal of the rental contract activated?
Successive automatic renewal is activated once the minimum legal period is exceeded: 5 years if the landlord is an individual, or 7 years if the landlord is a legal entity (company, partnership, fund). From that point on, the contract renews automatically unless the landlord notifies otherwise with 6 months' notice.
When does the landlord not have to pay compensation if they do not renew the rental?
The landlord is exempt from paying compensation if they prove one of these three justified grounds: (1) need for the property for their own use or direct family members, (2) lack of effective residence of the tenant in the property, or (3) availability to the tenant of another suitable property for their use. Outside these cases, compensation is mandatory.
How is the compensation calculated that the landlord must pay to the tenant?
According to Royal Decree-Law 28/2026, compensation is calculated based on the reference value of the property and the length of the tenant's residence. The higher the cadastral reference value and the longer the tenant has lived there, the greater the amount. The regulation does not set a fixed percentage or amount, so the calculation must be done case by case by consulting the cadastral reference value of the specific property.
Does this law affect rental contracts that were already signed before October 7, 2026?
Yes, but with nuances. The transitional regime establishes that the new regulation applies to expirations after entry into force (October 7, 2026). Non-renewal communications sent before that date maintain their effect. Contracts expiring from October 7 onwards are subject to the new automatic renewal and compensation regime.
Official source
Consult complete regulation in official source
Notice: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://www.boe.es/diario_boe/txt.php?id=BOE-A-2026-20822
