The Royal Decree-Law 27/2026, approved on September 29 and published this Thursday in the BOE as provision number BOE-A-2026-20385, comes into effect this Friday, October 2, and establishes new rules for extensions and compensation for residential lease contracts in Spain.
This is the second of the two housing decrees that the Council of Ministers approved in the same session. The first, RDL 26/2026, already came into effect on October 1 and regulates temporary rentals and room rentals; the second was delayed by one day in its publication because it modifies an article of the first, which was supposed to be in effect beforehand. The new rental measures that change the rules for tenants were announced on September 30, when the second decree was still listed as pending publication.
What changes in standard housing contracts?
The decree rewrites Article 10 of the Urban Leasing Law and establishes the continuity of the contract as the general rule. According to the text of the BOE, "the continuity of the contract becomes the norm, and its termination is an explicit decision of the landlord that must be made at specific times and with sufficient notice."
Once the minimum duration period has been exceeded —five years if the landlord is an individual and seven years if the landlord is a legal entity—, the contract is automatically renewed for successive periods of the same duration, unless one of the parties communicates their intention not to renew it in the terms provided by law.
The landlord's notice period to communicate this decision increases from four to six months, while the tenant's notice period remains at two months.
When is the compensation of at least 12 monthly payments due?
When the owner validly expresses their intention not to renew the contract and none of the exceptions provided by law apply, they must compensate the tenant with an amount equivalent to at least 12 monthly payments of the rent for a home with similar characteristics.
The calculation will be made, whenever possible, in accordance with the state reference system for housing rental prices and, in no case, may it be less than one month's rent for each year of the tenant's residence in the property. Therefore, in certain cases, the compensation may exceed 12 months' rent. Payment must be made at the time of handing over the keys.
The compensation is neither automatic nor universal. The decree outlines various circumstances in which the landlord can terminate the contract without having to pay this indemnity.
When compensation is not applicable
Among the provisions outlined in the decree is the stipulation that the landlord, when an individual, requires the residence for their own permanent accommodation, for specific relatives up to the second degree of consanguinity or adoption, or for their spouse in cases of separation, divorce, or annulment of marriage.
If the dwelling is not occupied within the timeframe specified by the regulation, unless there is a force majeure reason, the former tenant may regain the right to claim the corresponding compensation.
Compensation is also not applicable when the tenant has not actually occupied the dwelling for more than six months of the twelve months prior to the notification, except in justified cases provided by law, including certain circumstances related to health, employment, studies, or caregiving for family members.
Another exception arises when the tenant has another suitable residence to meet their housing needs in the same municipality.
The regulation also excludes compensation when the parties formalize a new lease agreement or when the tenant refuses a formal offer to continue in the same residence under a new contract that meets the legally established conditions.
Similarly, the decree includes specific cases of vulnerability for the lessor, which must be substantiated according to the requirements set by the regulation.
Additionally, the right to compensation does not arise when the tenant meets the requirements to qualify for a mandatory statutory extension provided for in the lease legislation, even if they ultimately do not apply for it.
What happens to the contracts already in effect?
The single transitional provision of the decree establishes a specific regime for existing contracts when the reform takes effect.
For contracts affected by the new rules, if less than six months remain until the contract's expiration at the time of the new regulations coming into effect, the landlord may notify their intention not to renew it with a minimum notice period of four months.
Notices of non-renewal validly made before the entry into force of the new regulation remain effective and are governed by the transitional regime established in the decree, without the approval of these new rules independently generating the right to the new compensation.
The regulation also establishes that the sale of the property does not automatically eliminate the tenant's potential right to receive compensation. In cases where the buyer takes over the landlord's position, they will assume the corresponding obligations unless one of the legally established exceptions applies.
Entry into force and parliamentary validation: two distinct deadlines
The decree takes effect from this Friday, October 2, but its continuation depends on its validation by the Congress of Deputies.
The Constitution states that decrees-law must be submitted to debate and parliamentary voting within 30 days following their promulgation. The extraordinary plenary session to vote on this regulation was scheduled for the same day it came into effect.
The validation was not guaranteed due to the positions announced by various parliamentary groups, including Junts and the PNV.
The expert José Ramón Zurdo from the Rental Negotiation Agency warned that if the decree is validated, "the supply after December 31, 2028, would be reduced to a third of the current level." This statement represents the specialist's estimate of the potential effects of the measure on the rental market.
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