Royal Decree-Laws 28/2026 and 29/2026 and the new residential lease regime (I): lease term, evictions, and transfers

Summary

The Official State Gazette (BOE) of October 7, 2026, published two Royal Decree-Laws that substantially alter the regime governing residential leases. The first, Royal Decree-Law 28/2026PDF,[1] whose entry into force has been deferred to November 15[2], provides that a lease of a main residence that has reached five years’ duration, or seven if the landlord is a legal entity, is to be tacitly and mandatorily extended for successive terms of five or seven years, unless the landlord gives notice of its intention not to renew six months in advance, in which case, unless one of the exhaustively listed grounds excluding it applies, the landlord must compensate the tenant with a minimum of twelve months’ rent. The second, Royal Decree-Law 29/2026PDF,[3] in force since October 8, narrows the scope of temporary leases and room leases, restricts the passing on of expenses and the requirement of guarantees, strengthens the rights of first refusal and redemption (derechos de tanteo y retracto), places on the public administration the burden of paying off the arrears to halt an eviction for non-payment (enervación del desahucio) when the tenant is vulnerable, and limits discounted acquisitions of housing by funds and large holders (grandes tenedores). Both instruments, which are pending ratification by Parliament (convalidación) through the Standing Committee (Diputación Permanente) of the Congress of Deputies, are analyzed here in their civil and procedural aspects, while their tax implications are the subject of a second note, which is available here.

1. Background and ratification

Both Royal Decree-Laws replace Royal Decree-Laws 26/2026 and 27/2026, which were repealed on October 2 when Congress refused to ratify them, so that, between the publication of the resolution declaring that repeal and the entry into force of Royal Decree-Law 29/2026 on October 8, the previous rules applied once again. This succession of instruments is not without consequences for those who acted during the very brief period in which the repealed instruments were in force, since the new text expressly treats as valid the extension requests made under Royal Decree-Law 8/2026,[4] but is silent on those submitted while Royal Decree-Law 26/2026 was in force; accordingly, the most prudent course for a tenant in that situation is to reiterate the request under the new rules.

Since Parliament (Cortes Generales) has been dissolved, ratification falls to the Standing Committee of the Congress, which must decide within the thirty days following promulgation,[5] and the outcome of that vote will determine the practical scope of everything set out in this note. If ratification of Royal Decree-Law 28/2026 were refused before November 15, the reform would never apply, whereas, if it were refused after that date, the repeal, which operates ex nunc—that is, only from the moment it occurs and going forward, without reaching what happened before—would leave considerable doubts as to the effectiveness of the acts carried out during its brief period in force. And if only Royal Decree-Law 29/2026 were ratified, the current regime of annual extensions would continue to apply, supplemented by the extraordinary two-year extension, with no five-year renewal and no compensation for non-renewal.

2. Royal Decree-Law 28/2026: five-year renewal and compensation

Until now, a lease of a main residence was mandatorily extended until it reached five or seven years’ duration[6] and, from then on, annually up to a maximum of three further years,[7] after which it either terminated or became subject to tacit renewal (tácita reconducción) under the Civil CodePDF, which turns it into a month-to-month or year-to-year lease depending on the frequency with which rent is paid.[8] The reform breaks with that scheme, providing that, upon expiry of the lease or of any of its extensions, and once at least five years have elapsed, or seven if the landlord is a legal entity, the lease “shall be tacitly and mandatorily extended for successive terms of five years, or seven years if the landlord is a legal entity,” with no limit on the number of renewals, unless the landlord has given notice of its intention not to renew six months in advance, as opposed to the four months currently required, or the tenant has done so two months in advance.[9] In practice, this renewal binds only the landlord, since the tenant retains the right to withdraw from the lease after six months, with thirty days’ notice and without that withdrawal any longer giving rise to any compensation in favor of the landlord.[10] Moreover, the rule extends to all leases of a main residence, including those of large dwellings or high-rent dwellings, which are no longer excluded from the mandatory regime.[11]

A landlord who decides not to renew must compensate the tenant with the greater of two amounts, namely twelve months’ rent or one month’s rent for each year the tenant has lived in the dwelling, calculated in both cases not on the agreed rent but on the upper value of the range that the state rental price reference system assigns to that dwelling and, only where that value cannot be obtained, on the rent in force on the date of the notice.[12] The choice of this calculation base has a consequence that owners should not overlook: in older leases, whose rents tend to be below market levels, the compensation may comfortably exceed twelve times the rent the tenant is currently paying.

Example: upper index value of €1,200 per month

The compensation is payable upon handover of the dwelling, except where the landlord has invoked its need to occupy it, and is not extinguished by the sale of the property, since it is assumed by the purchaser who is subrogated to the lease.[13] It should be noted, however, that the stability proclaimed by the reform is more fragile vis-à-vis third parties than it appears, because the rules protecting the tenant against the purchaser and against the successful bidder in a mortgage foreclosure, which have not been amended, limit that protection to the first five or seven years of the lease,[14] so that, once that period has elapsed, a lease not recorded in the Land Registry may not be enforceable against a party acquiring the dwelling in reliance on the public faith of the Land Registry (fe pública registral)[15] and, in a mortgage foreclosure, unless it was recorded before the right being enforced, it may even be extinguished.

3. When compensation is not payable

The reform exempts the landlord from the obligation to pay compensation in five exhaustively listed cases, which the landlord must state expressly, in detail, and in writing in the notice itself, failing which it may not rely on them later:[16]

1. a) that the landlord, being an individual, needs the dwelling as a permanent residence for themselves, for their relatives up to the second degree of consanguinity or by adoption, or for their spouse in cases of a final judgment of separation, divorce, or annulment, on the understanding that, if these persons do not occupy it within the three months following handover, save in cases of force majeure, the compensation accrues;
2. b) that the tenant has not lived in the dwelling for more than six months in the twelve months preceding the notice, unless the absence is due to a justified reason or the tenant’s non-separated spouse or dependent children have continued to live there;[17]
3. c) that, on the date of the notice and in the same municipality, the tenant has another dwelling suitable for their needs, which they own outright or over which they hold a right in rem of use or enjoyment allowing them to occupy it;
4. d) that the parties enter into a new lease of a main residence; and
5. e) that the tenant expressly or tacitly rejects a formal, verifiable offer of a new lease made by the landlord within the notice period, with a minimum term of five or seven years and a rent within the limits applicable in stressed residential market areas (zonas tensionadas), even if the dwelling is not located in one of them.[18]

To these grounds must be added another that may go unnoticed and is of particular importance for tenants: compensation is also not payable where the tenant meets the requirements for a statutory extension that the landlord is obliged to accept and does not request it, whereas, if the tenant does request it, the tenant retains the right to compensation, although it only becomes enforceable when that extension ends.[19] Extensions of this kind include the one provided for situations of vulnerability, which lasts a maximum of one year and is mandatory only for large holders;[20] the one applicable in stressed residential market areas, which is granted annually up to a maximum of three years and takes precedence over the others;[21] and the one introduced by Royal Decree-Law 29/2026 on an extraordinary basis, for annual periods of up to two years, in favor of tenants under leases in force on October 8, 2026, who have been up to date with payments over the preceding eight months, where the mandatory extension ends before December 31, 2028, or the period of tacit extension or tacit renewal ends.[22] These extensions cannot be combined with one another, and it should be borne in mind that, until Royal Decree-Law 28/2026 enters into force, the first two remain in paragraphs 2 and 3 of Article 10 of the Urban Leases Law (LAU), which that Royal Decree-Law renumbers as paragraphs 5 and 6.[23]

4. Transitional regime

The reform applies to existing leases, including those entered into before Law 12/2023PDF,[24] although only with respect to expiries occurring on or after November 15, 2026, and it takes as the cut-off date for notices not the date of its entry into force but that of its publication, October 7, with the declared purpose of preventing early notices aimed at circumventing it.[25] Two consequences of practical significance follow: leases currently in the annual extensions, whose termination in the eighth or tenth year many landlords took for granted, will be renewed for five more years unless proper and timely notice is given, and those under monthly tacit renewal will, in practice, become subject to five-year renewal. The table below summarizes the various scenarios.

5. Royal Decree-Law 29/2026: other civil and procedural changes

The lease of a room or space is now included within the lease of a main residence where its primary purpose is to meet the tenant’s housing needs, unless it is agreed as a temporary residential lease,[31] and the sum of the rents under partial leases in force at the same time may not exceed the rent under a single lease of the entire dwelling,[32] although the rule does not clarify, outside stressed areas, what that reference rent should be where no such lease exists. Temporary leases, for their part, require a genuine and verifiable reason for the tenant’s relocation, the burden of proof of which lies with the landlord, and a term exceeding thirty-one days which, as a general rule, does not exceed twelve months. The absence of a duly specified reason subjects the lease to the main-residence regime from the time it is executed, and unjustifiably exceeding twelve months, or entering into more than two consecutive temporary leases between the same parties for the same dwelling, means that the first lease is deemed to have been entered into as a main-residence lease.[33] Seasonal leases entered into before October 8 nevertheless retain their regime until the end of the agreed term, at which point they terminate with no possibility of extension.[34]

As regards rent, it may be updated only where so agreed and never above the change in the reference index for updating residential leases,[35] and, until December 31, 2027, an extraordinary limit also applies, which prevents any increase where the rent exceeds the rental price reference index and restricts it to 2% in other cases, unless the parties reach a new agreement.[36] Taxes associated with the dwelling, such as Property Tax (IBI), may not be passed on to the tenant unless the tenant is the taxpayer (obligado tributario); property management and lease execution costs, including those of its renewal, may not be passed on to the tenant under any circumstances; and general building expenses may be charged to the tenant only by written agreement setting their annual amount, with no possibility of charging homeowners’ association fees where the building is not organized under the condominium regime (propiedad horizontal).[37] Any guarantee in addition to the statutory security deposit (fianza) may not exceed two months’ rent in leases of up to five years, or seven if the landlord is a legal entity, or one month’s rent in temporary leases, and in no case may the tenant be required to take out rent default insurance.[38] At the end of the lease, the parties must record in writing the condition of the dwelling, and if they fail to do so, or if the document does not reflect any damage, it is presumed, unless proven otherwise, that the dwelling was returned in an adequate state of repair, a rule that has a direct bearing on the possibility of withholding the deposit.[39] Finally, the rights of first refusal and redemption extend to joint sales of several properties, provided that the leased dwelling can be legally individualized and a portion of the price is allocated to it, and a waiver of these rights may no longer be agreed in the lease.[40]

On the procedural side, until December 31, 2030, where the claimant is an entity engaged in acquiring properties or portfolios of non-performing mortgage loans at a price clearly below their appraised value, the court must stay the eviction proceedings if the defendant is vulnerable and lacks alternative housing, even if judgment has already been handed down or the physical eviction (lanzamiento) has been ordered, provided that it has not yet been carried out.[41] In other cases, where the eviction is for non-payment and the tenant proves economic vulnerability, the public administration will have two months, during which the proceedings will be stayed, to offer the tenant suitable alternative housing or, failing that, to pay or deposit the amount owed and the court costs, and, if it does neither, it will be subrogated to the tenant’s position as debtor, and the physical eviction will not take place.[42] In proceedings to which that mechanism does not apply, the court will request a report from the public administration and, if there is no alternative housing, will stay the proceedings, subject to review every twelve months and for a maximum of three years, during which the public administration must compensate a claimant who is an individual, or a legal entity engaged in affordable or social rental housing, for the rent not received, the unpaid utilities, and the court costs. However, a stay is not appropriate where the vulnerability of the claimant must prevail, unless the claimant is a legal entity or a large holder, nor does the defendant’s economic vulnerability prevail where the claimant is an individual who owns two dwellings or fewer.[43] Both these stays and the halting of the eviction through payment by the public administration also apply to pending enforcement of eviction proceedings in which the physical eviction has not been carried out and, in the case of the stays, even if the maximum stay period previously provided for had been exhausted.[44]

Until that same date, the entities just referred to, as well as legal entities qualifying as large holders and the entities of their group, are restricted from acquiring dwellings free of charge or for less than 70% of their market value, as determined by an independent appraisal company as of the date of the binding agreement, unless the dwellings are earmarked for certain social purposes.[45] The restriction only carves out transfers executed in a public deed before October 8, so that private purchase agreements or earnest money agreements (contratos de arras) signed before that date, but not yet executed in a public deed, are not excluded from it.[46] The exceptions provided for entities adhering to a Code of Good Practice and for acquisitions arising from enforcement proceedings will not apply until the Council of Ministers approves that Code and it enters into force, and, in any event, the rule does not specify the consequences of non-compliance.[47] In addition, assignments of mortgage loans become subject to new safeguards in favor of the debtor.[48]

6. Frequently asked questions

Will I be able to recover the dwelling when the lease reaches five years?

You will, but, if Royal Decree-Law 28/2026 is ratified, you will have to give notice of your intention not to renew six months in advance, or four months where the expiry falls before May 15, 2027, and pay the compensation upon receiving the keys, unless one of the grounds excluding it applies,[49] bearing in mind that, if you do not give notice in time, the lease will be renewed for another five years, or seven if the landlord is a company.

I need the dwelling for one of my children. Do I have to pay compensation?

No, provided that the landlord is an individual, the reason is stated expressly and in detail in the notice, and the child occupies the dwelling within the three months following handover.[50] However, if the dwelling is located in a stressed area, the tenant may request the extension of up to three years, which yields only to the need of the landlord or of the landlord’s first-degree relatives notified within the time limits and under the conditions of the mandatory extension, which include having expressly stated that need in the lease at the time it was entered into; thus, if the lease does not provide for it, the tenant will obtain the extension even if the need is genuine.[51]

The dwelling belongs to a company. What changes?

The renewal cycles extend to seven years and the company may under no circumstances invoke its need for the dwelling to avoid the compensation, although it may rely on the other grounds for exclusion.[52]

Can I sell the dwelling with the tenant in place?

You can, but the purchaser who is subrogated to the lease also assumes the obligation to pay compensation if it later decides not to renew the lease,[53] although, once the first five or seven years have elapsed, an unrecorded lease may not be enforceable against the purchaser if it acquires in reliance on the public faith of the Land Registry.[54] In any event, the tenant’s rights of first refusal and redemption, which can no longer be waived, must be respected.[55]

Will I be able to increase the rent when the lease is renewed?

Upon automatic renewal the lease remains the same, so the rent may only be updated as agreed and subject to the cap of the update index,[56] to which is added, until December 31, 2027, the prohibition of any increase where the rent exceeds the limit of the reference index and, in other cases, the 2% cap absent a new agreement.[57] Since, in addition, agreed extensions may not worsen the terms of the lease, setting a different rent requires entering into a new lease, which the tenant is not obliged to accept.[58]

I have already sent the non-renewal letter. Is it still valid?

If it was validly sent before October 7, 2026, it remains effective and does not give rise to compensation, whereas, if it was sent afterwards and the expiry falls after November 15, it will be subject to the new regime in the event of ratification, and compensation will be payable unless the notice states one of the grounds excluding it.[59]

Can the lease provide that there will be no renewal and no compensation?

No, because the law declares null and void, and deems not to have been included, any clauses that modify to the tenant’s detriment the rules on residential leases, which include the renewal.[60] A different matter is any agreement the parties may reach once the notice has been sent, for example on the move-out date, the validity of which will depend, in each case, on its not concealing a waiver of rights that the law declares non-waivable.

Are seasonal or room rentals still an alternative?

They are, but on much narrower terms than before, because room rentals intended to meet the tenant’s housing needs are now leases of a main residence, with the same duration and the same extensions, and seasonal leases require a genuine reason for relocation, evidenced in the lease, without which they are deemed main-residence leases from the time they are signed.[61]

Can I pass on the IBI or require rent default insurance?

No. Property Tax may only be passed on where the tenant is the taxpayer, and agency fees are always borne by the landlord.[62] An additional guarantee, such as a bank guarantee, of up to two months’ rent may be agreed in leases of up to five or seven years, but the tenant may not be required to take out rent default insurance, which the owner may, however, take out on its own account and at its own expense.[63]

If the tenant stops paying, do I have to compensate them?

No, because compensation is only payable where the landlord decides not to renew, whereas non-payment is a ground for termination of the lease.[64] However, if the tenant proves economic vulnerability, the public administration will have two months to offer alternative housing or pay the debt and, if it does neither, it will be subrogated to that debt and no physical eviction will take place, so that the landlord will have the public administration as its debtor but might not recover the dwelling for as long as the situation of vulnerability persists.[65]

How should I serve the notice?

The law does not require any specific means, but, since the grounds excluding compensation must be stated expressly, in detail, and in writing in the notice itself,[66] written form is, in practice, essential, and the advisable course is to send it by burofax with certified content and acknowledgment of receipt, or by notarial demand, to the address designated in the lease and with sufficient time for a second attempt.

And what if the Royal Decree-Laws are not ratified?

If Royal Decree-Law 28/2026 is not ratified, there will be no five-year renewal and no compensation, and the current regime will continue to apply, although, if the vote took place after November 15, the new regime would have applied in the meantime. If it is Royal Decree-Law 29/2026 that lapses, the two-year extension, the 2% cap, and the new rules on temporary leases will disappear, in principle without affecting what was done while it was in force, although the effectiveness of those acts could come to be disputed.[67]

7. Recommendations

Landlords should review the expiry schedule of their leases, give verifiable and timely notice, stating in detail any applicable ground for exclusion, adapt their lease templates to the new rules, and always sign, upon recovering the dwelling, the document recording its condition. Tenants, for their part, should stay up to date with payments and, if they receive a notice, request the extension to which they are entitled, since failing to do so may deprive them of the compensation. Finally, purchasers and investors should include in their pre-acquisition due diligence the age and registration status of the leases and, where they acquire at a discount, check whether the restriction introduced by Royal Decree-Law 29/2026 applies to them.[68]

Many of the issues analyzed in this note are open to different interpretations. If the Royal Decree-Laws are ratified, it will be for the courts to rule on those that may give rise to divergent views, and the conclusions set out here are therefore without prejudice to any case law that may be established.

This note is for information purposes only and does not constitute legal or tax advice. Each lease requires an individual analysis.

About the author

Juanjo García, Associate at OC | Tax & Legal, is a professional specializing in comprehensive tax advice and litigation, and an Expert in Taxation (UAM). He is an Associate Professor of Argumentation at the Faculty of Law of Universidad CEU San Pablo, among other educational institutions. He has been recognized in the “Ones to Watch” category of the international Best Lawyers 2026 ranking

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