Tenants and landlords face new rules for residential lease stability

The Spanish Government has enacted Real Decreto-ley 28/2026, of October 6, through which urgent measures are adopted to reinforce the stability of habitual residence lease contracts. This regulation, published in the BOE (BOE-A-2026-20822), seeks to mitigate the tension between supply and demand by preventing the expiration of a contract from being used as a primary mechanism to transfer price increases to households.

What changes

The core of this reform lies in the new wording of Article 10 of Law 29/1994, of November 24, on Urban Leasing (LAU). The objective is to guarantee the continuity of residential lease contracts regarding their duration and extinction. By modifying the existing legal framework, the government aims to ensure that the end of a contractual term does not automatically trigger a market-driven rent reset that ignores the tenant's history and the stability of their environment.

Specifically, the law addresses the issue where, after the mandatory extension periods, the contract expires or enters into tacit reconduction under the Civil Code. Under the previous regime, after eight or ten years, tenants lost all guarantees of permanence, allowing the property to return to the market under new, often significantly higher, conditions. The new measures seek to create a more stable temporal framework, reducing the frequency of these transitions and the associated costs for both parties.

Context

This Royal Decree-law is inserted into a complex legislative landscape. It follows the recent repeal by the Congress of Deputies on September 29, 2026, of previous urgent housing measures, specifically Real Decreto-ley 27/2026. This legislative instability, coupled with significant social mobilization, prompted an extraordinary Council of Ministers to address the housing crisis through this new instrument.

The regulation modifies Article 10 of the Law 29/1994 (BOE-A-1994-26003) and is closely related to la disposición final 5 del Real Decreto-ley 29/2026, de 6 de octubre. The government justifies this urgent intervention by citing the need to provide a stable framework in a market characterized by high rotation and high transaction costs. The text draws inspiration from European comparative law, noting that models in Germany, France, and the Netherlands prioritize lease stability to reduce vacancy periods and transaction costs, which in turn benefits the overall market health.

Who is affected and how

Individual Tenants (Arrendatarios)
For individuals renting their habitual residence, the law provides a significant increase in legal certainty. The primary benefit is the reduction of uncertainty and the costs associated with high turnover, such as moving expenses, new security deposits, and the social disruption of changing schools or workplaces. The goal is to allow families to plan their lives based on a certain and predictable housing arrangement.

Individual Landlords (Arrendadores)
Private owners of residential property will see a shift toward a model of greater continuity. While the law aims to protect the tenant, it also seeks to reduce vacancy periods (desocupación), which can be a benefit for owners seeking steady income. However, they will face stricter rules regarding the termination of contracts and the ability to unilaterally impose new market rates upon the expiration of the initial term.

Legal Entities and SMEs (Personas Jurídicas y PYMEs)
Companies or SMEs that act as landlords of habitual residences are subject to more stringent requirements. The regulation specifically targets the ability of legal entities to set new rents at the end of a contract. For these entities, the framework is designed to limit the practice of using contract expiration as a tool for rapid rent escalation, moving the market toward a more regulated and stable evolution of contractual rents.

What to do and when

This regulation enters into force on November 15, 2026. Because this is a structural change to the Urban Leasing Act (LAU), the following considerations apply:

• For existing contracts: Parties should monitor the expiration dates of current leases to understand how the new rules on duration and extension will apply to their specific renewal processes.
• For new contracts: Any lease agreement signed after the entry into force must strictly adhere to the new provisions of Article 10 of the LAU.
• For landlords: It is advisable to review current rental portfolios to anticipate the impact of the new stability requirements on future rent adjustments and contract terminations.

As this regulation introduces fundamental changes to the contractual relationship between owners and tenants, we recommend contacting the relevant area at BMC to evaluate how these changes specifically affect your current lease agreements or real estate assets.