Spanish Housing Market Reverts to Previous Rental Extension Rules

Following the rejection of Royal Decree-laws 26/2026 and 27/2026 by the Congress of Deputies, Spain's rental market has reverted to the regulations established by the Urban Leasing Law (LAU).

The dismissal of these reforms means that the proposed protections for tenants, such as extraordinary extensions and specific compensation for non-renewal, are no longer in effect. Under the current LAU framework, once a contract reaches its minimum duration of five or seven years, it enters annual extensions for a maximum of three years if neither party communicates an intent to non-renew.

Legal expert Sandra Aurrecoechea notes that notice periods have also reverted: landlords must provide four months' notice, while tenants must provide two. Furthermore, the general compensation for non-renewal introduced by the rejected decree is no longer applicable. Experts warn that while seasonal rentals remain a factor, courts will continue to scrutinize contracts to prevent fraud where the designation does not match the actual purpose of the lease.