The upcoming second housing decree, scheduled for publication in the Official State Gazette, will mandate that landlords compensate tenants with a minimum of 12 months’ rent if they choose not to renew a lease.
This measure stems from an amendment to Article 10 of the Urban Leases Law. Once the minimum mandatory period is completed—five years for private landlords and seven years for legal entities—contracts will automatically extend for successive periods of the same duration unless notice is given. Landlords must provide at least six months’ notice, whilst tenants must give two months.
If a landlord chooses not to renew without citing an exempting reason, they must pay compensation equal to at least 12 months’ rent for a similar dwelling, calculated via the state rental price reference system, and no less than one month’s rent for each year the tenant resided in the property.
Exemptions from compensation apply if the landlord or close relatives require the property, the tenant fails to occupy it for over six months a year without cause, the landlord owns another suitable property in the same municipality, a new regulated lease is signed, or the tenant rejects such an offer. Landlord vulnerability is also accounted for.
The publication of the decree in Madrid has been delayed by one day due to technical and legal coordination with the first housing package. Congress will vote separately on both texts in an extraordinary plenary session on Friday. Representatives from the Tenants’ Union have voiced concerns that splitting the decrees could risk the rejection of the second regulation.
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