Rental extension: Royal Decree-Law 28/2026 rewrites Article 10 of the LAU

Royal Decree-Law 28/2026 of 6 October, adopting urgent measures to strengthen the stability of leases of main homes, was published in BOE no. 249 on 7 October 2026. Under its second final provision, it comes into force on 15 November 2026.

Its single article gives a new wording to Article 10 of Law 29/1994, the Urban Leases Act (LAU), which regulates the extension of the contract. That same article had been amended by Royal Decree-Law 29/2026, approved the same day. For firms advising landlords or tenants, it is a change of immediate practical application.

Tacit extension

Under the new Article 10.1, once the minimum term of the contract has run, five years or seven if the landlord is a legal entity, the contract is extended for periods of the same length, unless one of the parties communicates that it does not want to renew.

Notice periods

• The landlord must communicate non-renewal six months in advance, instead of the previous four.
• The tenant keeps a notice period of two months.

Compensation to the tenant

The main novelty is economic. When the landlord validly communicates non-renewal, they must pay the tenant the greater of two amounts:

• Twelve months of rent.
• One month for each year of residence.

Both are calculated using the system of reference price indices. Payment is due on handing over the home. If the home is sold and the buyer takes over the landlord's position, the right to compensation remains.

When there is no compensation

Article 10.2 lists five cases:

1. The individual landlord needs the home as a permanent residence for themselves or for certain relatives.
2. The tenant has not lived in the home for more than six months in the previous twelve, without justified cause.
3. The tenant has another suitable home in the same municipality.
4. The parties sign a new contract.
5. The tenant rejects a valid offer of a new contract on the same home.

Other rules

• Agreed extensions (Article 10.3): cannot be shorter than the legal periods.
• Nullity (Article 10.4): clauses in extension agreements that worsen the terms of the original contract for the tenant are void.
• Extraordinary extensions: Article 10.5 provides for up to one year for tenants in a situation of social and economic vulnerability, mandatory to accept when the landlord is a large holder. Article 10.6 provides for annual extensions of up to three years in stressed residential market areas, which take priority.

Transitional regime

The single transitional provision sets how the reform applies to existing contracts:

• It only affects expiries after its entry into force.
• Non-renewal notices sent before publication keep their effects and generate no compensation.
• If fewer than six months remain until expiry when it comes into force, the landlord may communicate non-renewal at least four months in advance.
• Contracts already in extension end according to the previous wording.
• Contracts in tacit renewal follow the new Article 10 from the first expiry after entry into force.

Validation

According to its preamble, the royal decree-law is referred to Congress for validation. The BOE page consulted did not show its status at the date of this article. It is wise to check before 15 November.

What to review at the firm

1. Identify client contracts expiring after 15 November.
2. Review non-renewal notices already sent and their date.
3. Calculate the possible compensation with the reference price index system.
4. Check whether the property is in a stressed market area.

Civil claims arising from these rules may be subject to the requirement of attempting ADR first, as we explain in the guide to the precondition for suing. For those handling them under the duty-solicitor scheme, the new duty-solicitor modules apply. More news in Industry news.