From 2 October 2026, residential renting in Spain works under different rules. Royal Decree-Law 27/2026 amends Article 10 of the Urban Leases Act (Ley de Arrendamientos Urbanos, LAU) and changes two things that affect every contract: how long it lasts and how much it costs not to renew it.
If you rent out a property or live in rented accommodation, this concerns you. Ending a contract when it reaches its expiry date will no longer be so simple for the landlord, and in many cases it will not be free either.
In short: under Royal Decree-Law 27/2026, rental contracts are automatically extended for 5 years (individual landlord) or 7 years (company) if nobody says anything. If the landlord does not want to renew, they must give 6 months' notice and pay the tenant compensation of, as a general rule, 12 months' rent, except in the exceptional cases set out in the law.
We explain, point by point and without jargon, what changes and what you should do depending on your situation.
Automatic extension of the tenancy: 5 or 7 more years
This is the fundamental change. Until now, when the mandatory term of the contract ended (5 years if the landlord is an individual, 7 if it is a company), the tenancy could be extended year by year up to a maximum of 3 years. That system disappears.
Under the new law, if the expiry date arrives and neither party says anything, the contract is extended automatically, and for full periods of the same length as the original contract:
| Type of landlord | Before the reform | With RDL 27/2026 |
| Natural person (individual) | Annual extension, maximum 3 years | 5 more years, successively |
| Persona jurídica (empresa) | Annual extension, maximum 3 years | 7 more years, successively |
In practice, a contract that nobody touches can remain in force for many years. That is why it is so important to know when and how notice of non-renewal can be given.
6 months' notice for the landlord
If the landlord does not want to renew, giving 4 months' notice is no longer enough. They must now give notice at least 6 months before the expiry date.
The tenant, on the other hand, keeps the same notice period as before: if they are the one who wants to leave, 2 months' notice is enough.
Our advice for landlords: write down the expiry date of your contract today and subtract 6 months. That is your last day to give written notice of non-renewal, and doing it late means a new extension of 5 or 7 years.
Compensation for not renewing the tenancy: 12 months' rent
This is the flagship measure of the reform and the one that will generate the most debate. If the landlord decides not to extend the contract, even if they give the 6 months' notice, they will have to pay compensation to the tenant. The idea is to compensate them for the costs of moving and of finding a new home.
- How much is paid. As a general rule, the equivalent of 12 months' rent, calculated based on the reference price of a similar home in the area.
- The legal minimum. In no case may it be less than one month's rent for each year the tenant has lived in the property. The months or days of the last year are calculated proportionally.
- When it is paid. At the very moment the tenant hands over the keys and vacates the property.
For a landlord, this completely changes the decision not to renew: it is no longer just a question of dates, but also of cost.
When NO compensation has to be paid
The law also protects the landlord in situations of need or against tenants who do not comply. To be exempt from paying, the landlord must claim and justify in writing one of these grounds, which are the only ones the law accepts:
- Family need. The landlord needs the property for themselves, their children, their parents or their spouse in the event of divorce. Note: if they do not move in within 3 months, the tenant may claim the compensation.
- Property not genuinely used. The tenant has not actually lived in the home for more than 6 months in the last year, except for reasons of work, health or studies.
- The tenant has another home. They own or have the use of another property in the same municipality that meets their needs.
- New agreed contract. Both parties sign a new long-term contract to remain in the property.
- Rejection of a fair offer. The landlord offers a new 5 or 7-year contract, at a price within the legal limits, and the tenant rejects it.
- Landlord vulnerability. The landlord proves that they need to recover the property, or cannot afford the compensation, because they themselves are in a situation of economic vulnerability.
The key lies in "justifying in writing". A poorly drafted notice or one without evidence may mean the exception does not apply and the landlord ends up paying.
Does it affect rental contracts already signed?
Yes. If you have a contract in force, the new law affects you too. It applies to all contracts in force whose expiry dates or extensions fall after 2 October 2026.
There are two transitional rules worth knowing:
- Contracts expiring in less than 6 months. If, when the law comes into force, there are less than 6 months left until expiry, the landlord may object to the extension by giving 4 months' notice instead of 6.
- Contracts under "tacit renewal" If your contract had already been tacitly extended under the Civil Code, it will be adapted to the new law at the first expiry date occurring after 4 months from the law's entry into force.
Relationship with Royal Decree-Law 26/2026
This reform is complemented by Royal Decree-Law 26/2026 of 29 September. If a tenant is in an extraordinary protection extension of up to two years and the landlord decides to terminate the contract when it ends, the tenant will still be entitled to their compensation of 12 months' rent. This way, nobody is left unprotected at the end of that extension.
Frequently asked questions about the new Royal Decree-Law on renting
Since when does Royal Decree-Law 27/2026 apply?
Since 2 October 2026. It affects new contracts and those already in force, provided their expiry or extension falls on or after that date.
Can the landlord refuse to renew the rental contract?
Yes, but they must give at least 6 months' notice and, unless one of the exceptions in the law applies, pay the tenant the corresponding compensation.
Does the tenant have to pay anything if they leave?
Not under this reform. If it is the tenant who decides not to continue, 2 months' notice is enough.
What happens if the landlord recovers the property for a family member and then nobody moves in?
If the property is not occupied by the person indicated within 3 months, the tenant may claim the compensation.
How does it affect you? We review your contract
Every contract is different, and with this reform a mistake with dates or a poorly framed notice can prove very costly.
- If you are a landlord,we help you plan the future of your property: we calculate your deadlines, assess whether you can rely on any exception and draft the notice of non-renewal with every guarantee.
- If you are a tenant,we explain what rights you now have, how much compensation you are entitled to and how to claim it if the landlord does not comply.
At CBL Abogados, our law firm in Alicante, we review your rental contract and tell you exactly where you stand and what to do. Contact us and we will resolve your case before the deadlines run out. Contacta con nosotros y resolvemos tu caso antes de que corran los plazos.
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