Spain’s government is set to require landlords to pay tenants at least a year’s rent if they refuse to renew a lease without justified cause. The move, part of a sweeping housing reform, aims to shift the balance of power in the rental market and could reshape how contracts are negotiated.
Landlords in Spain are about to face a new rule. If they end a rental contract without a valid reason, they must pay tenants at least twelve months’ rent. This comes from a government decree that will soon appear in the BOE. The change is big. It brings automatic renewal for rental contracts and strict compensation rules for owners who end agreements without cause. El Diario and ARA report that the payout is tied to the official rental price index. It cannot be less than one month for every year the tenant has lived there.
The main change is in Article 10 of the Ley de Arrendamientos Urbanos (LAU). After the first mandatory period—five years for individuals, seven for companies—contracts will now renew automatically for the same length. Either side can end the agreement, but they must give notice. Landlords must give six months’ notice. Tenants only need to give two. This setup aims to give tenants more stability and cut down on sudden evictions. Heraldo and other national outlets have covered these details.
The extraordinary two-year extension for expiring rental contracts, provided tenants have paid regularly, will remain in force until December 31, 2028.
If a landlord wants to end a contract, they no longer need a specific reason. But they must pay at least twelve months’ rent, based on the state’s official rental price index. The law says the sum cannot be less than one month for every year the tenant has lived in the home. There are exceptions. Landlords do not have to pay if they need the property for themselves or close family. No payout is needed if the tenant has not lived in the home for more than six months without a good reason, or if the tenant owns another suitable home in the same town. Signing a new regulated contract also counts as an exception. If the landlord can prove they are vulnerable, that is another valid exemption. These points are spelled out in the draft and confirmed by ARA and other independent summaries.
The government split the housing reform into two decrees. The first lets tenants ask for a two-year extension. The second, now in the spotlight, brings in automatic renewal and the compensation rule. Officials say this order is needed for legal clarity. The second decree changes parts of the first, which is not yet published. Congress will vote on both texts separately in a special session on Friday. The government is counting on public support for tenant rights to put pressure on coalition partners who are still unsure. Minister Pablo Bustinduy says this approach will make the reforms strong and legally clear.
Tenant groups, especially the Sindicato de Inquilinas, are not happy. They say splitting the decrees could mean the automatic renewal rule gets blocked. That would weaken the push for contracts that let tenants stay as long as they meet their obligations and there is no justified reason for eviction. The debate grew louder after Maricarmen’s eviction by Urgabestión. That case made national news and was previously covered here.
Several independent analyses note that the new mechanism brings some rental contracts closer to an indefinite or open-ended status, with exceptions maintained for cases of landlord or close relative need. The reform is presented as a move to strengthen rental stability rather than a temporary extension, and is part of a broader package of urgent housing measures being debated amid a tense rental market.
Talks inside the government have been tense. Left-wing parties back the tenant movement’s demands. PSOE is trying to balance these with the wishes of key allies like PNV and Junts. Officials say the delay in publishing the decree is only technical. But the stakes are high. The result will decide if Spain’s rental market shifts toward long-term tenant security or stays stuck in cycles of renegotiation and doubt.
If passed as written, this reform would be one of the biggest changes to Spanish rental law in years. Landlords will pay a price for ending contracts without cause. The government is betting this will bring more stability for tenants and change the balance of power. Will it work? That depends on the final vote in parliament and whether all sides stick to the new rules.
