Royal Decree-law 28/2026: automatic renewal of rental contracts, notice period and compensation (2026 guide)

It comes into force on 15 November 2026 and applies to contract expiry dates after that date. In this guide we explain what changes, who it affects and what you should do now, whether you are a landlord, a tenant or you work at a letting agency.

Is Royal Decree-law 28/2026 already in force?

Not yet. The decree must be validated by the Standing Committee (Diputación Permanente) of the Congress within 30 days of its approval, which took place on 6 October. If it is not validated, it is repealed and never applies.

Even so, it is worth taking it into account from today, because it uses its publication in the BOE (7 October) as the cut-off date: non-renewal notices sent before that day remain effective without compensation; those sent afterwards, if the expiry date is after 15 November, are subject to the new regime.

You can read the full text in the BOE.

The essentials of the new rental law in one minute

• Longer contracts: once 5 years have passed (7 if the landlord is a company), the contract is renewed in full cycles of 5 or 7 years, unless one of the parties gives notice that it does not want to renew.
• Landlord's notice period: goes from 4 to 6 months. The tenant still gives 2 months' notice.
• Compensation: as a general rule, a landlord who does not renew will have to compensate the tenant.
• Key date: 7 October 2026, for non-renewal notices.

What changes with Royal Decree-law 28/2026

Automatic renewal of rental contracts in cycles of 5 or 7 years

Once the minimum term has been completed, the contract is automatically extended for another 5 years, or 7 if the landlord is a legal entity, and so on. It is only interrupted if one of the parties gives notice that it does not want to renew.

6 months' notice for the landlord

A landlord who does not want to renew must give 6 months' notice, compared with the current 4. The tenant keeps their 2-month notice period. As a transitional rule, if on 15 November there are less than 6 months left until expiry, 4 months' notice is enough.

Compensation for the tenant if the landlord does not renew

The compensation for not renewing the rental will be the greater of these two amounts: 12 monthly payments or 1 monthly payment for each year of residence. It is calculated using the upper value of the range that the state rental price reference system assigns to the property or, if there is none, using the rent in force on the date of the non-renewal notice. Periods of less than a year are prorated. It is paid when the property is handed back.

An example with a reference value of €1,000 per month: if the tenant has lived in the property for 8 years, the compensation would be €12,000 (12 monthly payments is more than 8). If they have lived there for 14 years, it would be €14,000.

It does not apply if the tenant can request a statutory extension that the landlord is obliged to accept and does not request it. If they do request it, the compensation is collected at the end of that extension.

When no compensation has to be paid

• The landlord, as a natural person, needs the property as a permanent residence for themselves, for relatives up to the second degree or for their spouse following a final judgment of separation, divorce or annulment. If they do not occupy it within 3 months of it being handed back, except in cases of force majeure, the compensation is owed.
• The tenant has spent more than 6 of the last 12 months without living in the property, without justified cause (this does not count if their spouse or dependent children continued to live there).
• The tenant has another suitable home in the same municipality, owned or with a right of use, and can occupy it.
• The parties sign a new contract.
• The tenant rejects, expressly or tacitly, a verifiable offer of a new 5- or 7-year contract, made within the notice period, with a rent that complies with the containment rules of art. 17.6 of the LAU (Urban Leases Act) (essentially, the previous rent updated).

In all cases, the reason must be stated in writing and in detail in the notice.

Voluntary extensions

If, after the non-renewal notice, the parties agree to extend the contract, the extension cannot be shorter than 5 or 7 years. In addition, any conditions that make the contract worse for the tenant are null and void.

Sale of a rented property

The sale does not affect the tenant's right to compensation. Where applicable, it is paid by the buyer who takes over the contract.

What happens to rental contracts that are already in force

Non-renewal notices sent before 7 October

Non-renewal notices validly sent before 7 October 2026 remain effective and do not give rise to compensation. Those sent afterwards are subject to the new regime if the expiry date is after 15 November.

Contracts in annual extension or tacit renewal

Contracts that are already in the annual extension period (up to 3 years) remain in that period until it ends under the current rules, and then move to the new regime. Those in tacit renewal (tácita reconducción) move to the new regime at their first expiry date after 15 November.

Relationship with the 2-year extension of RDL 29/2026

The extraordinary 2-year extension of Royal Decree-law 29/2026 does not apply when renewal by cycles applies. If it is applied to a contract for which notice has already been given, the contract ends when that extension finishes and, if none of the exclusion grounds applies, the tenant is entitled to compensation, unless the non-renewal notice was sent before 7 October 2026.

What does not change

• The minimum term of the contract: 5 years, or 7 if the landlord is a legal entity.
• The tenant's notice period: 2 months.
• The extraordinary extensions for vulnerability (1 year, with a large holder) and in stressed areas (up to 3 years). As a new feature, they cannot be combined with other extraordinary extensions and, when they end, the contract terminates without the need for a new notice and, where applicable, the compensation is paid at that point.
• The landlord's right not to renew at each expiry date, with notice and, where applicable, compensation.

How the new rules protect the landlord

• Notices already sent: non-renewal notices validly sent before 7 October do not give rise to compensation.
• Need for the property: a landlord who is a natural person and needs the property for themselves or their family does not have to pay compensation, provided they occupy it within 3 months of it being handed back.
• Offer of a new contract: if the tenant rejects it, there is no compensation.
• Predictable calculation: the compensation is calculated using objective criteria, known in advance by both parties.

If you are a landlord, you will find all the information on how to rent out with guarantees on our website.

What happens to your Finaer Guarantee

Your Finaer Guarantee keeps working in the same way. If the contract gets longer, so does the guarantee: when the contract is renewed for a new cycle of 5 or 7 years, the Finaer Guarantee is extended with it and keeps protecting the landlord throughout the new period.

Recommendations if you are a letting agency or a landlord

• Let landlords know that the non-renewal notice period becomes 6 months and may involve compensation from 15 November.
• Review in good time the contracts that expire in the coming months and those that are in tacit renewal.
• If the landlord does not want to renew, they should state in writing and in detail in the notice the reason that excludes compensation.
• If you sell a rented property, inform the buyer that they take over the contract and, where applicable, the compensation for not renewing.

Royal Decree-law 28/2026 timeline

Frequently asked questions about Royal Decree-law 28/2026

Conclusion

Royal Decree-law 28/2026 makes rental contracts longer, extends the landlord's notice period and turns non-renewal into a decision with a cost, except in specific exceptions. Although it still depends on its validation, the date of 7 October already counts. Review now the contracts that expire in the coming months and, if you rent with the Finaer Guarantee, remember that your guarantee accompanies the contract at every renewal.