Spanish Rental Contract: Essential Clauses, LAU, and 2026 Updates

The Legal Framework: LAU + Housing Act 2023

Residential tenancies in Spain are governed by the Urban Tenancies Act (LAU, Law 29/1994), as amended by Royal Decree-Law 7/2019 (which set the minimum term at 5/7 years) and, critically, by the Housing Rights Act (Law 12/2023), which introduced structural changes to rent updates, rent caps in stressed markets, and extraordinary extension rights.

Minimum Duration and Extensions

• Individual tenant: 5-year mandatory minimum
• Corporate tenant: 7-year mandatory minimum

During this period, the landlord cannot terminate except for specific statutory causes (non-payment, damage, unlawful activity). The tenant may withdraw with 30 days' notice (potentially subject to a proportional penalty).

After the minimum period, annual tacit renewals apply (up to 3 more years) unless either party gives notice: landlord must give 4 months, tenant 2 months.

In government-designated stressed rental market zones, tenants can request an extraordinary 1-year extension beyond the minimum if they prove economic vulnerability.

Rent Updates: IRAV (2026)

The reference index for residential rent updates is now the IRAV (Residential Rent Update Reference Index), published monthly by Spain's National Statistics Institute (INE). It replaces CPI as the standard for rent indexing, keeping increases below general inflation.

In stressed market zones, new contract rent cannot exceed: (a) the previous tenant's rent + annual IRAV, or (b) the Ministry of Housing's reference price index.

Essential Clauses Checklist

Every Spanish residential rental contract must include:

1. Full identification of both parties (name, NIF, address)
2. Full property description (address, useful area, cadastral reference, annexes)
3. Expressed purpose: primary residence (to trigger LAU residential regime)
4. Monthly rent (numbers and letters), payment date, landlord's bank account
5. Rent update clause (IRAV-referenced, annual)
6. Duration (start date, end date, reference to 5-year minimum)
7. Deposit: 1 month's rent (must be deposited with the regional housing authority)
8. Additional guarantee: max 2 months (for contracts ≤5 years)
9. Expense allocation (utilities vs. IBI vs. community fees)
10. Property condition description + photographic inventory
11. Works clause (tenant's works generally require landlord consent)
12. Prohibition of subletting without landlord consent
13. Pre-emption rights (tanteo y retracto, Art. 25 LAU), can be waived for contracts >5 years

Void Clauses to Avoid

• Waiving the 5-year minimum (imperative rule, cannot be contracted away)
• Using CPI instead of IRAV for updates from 2024 onwards (void as contrary to mandatory law)
• Penalties above 1 month's rent per remaining year for early withdrawal
• Exempting the landlord from liability for hidden defects

Energy Certificate

An energy efficiency certificate is mandatory and must be provided to the tenant before signing. Since Law 12/2023, energy rating disclosure is a statutory obligation.

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