LAU (Ley de Arrendamientos Urbanos)

Minimum contract duration

Under the current LAU (reformed in 2019), the minimum contract duration is 5 years if the landlord is a natural person (an individual) and 7 years if the landlord is a legal entity (a company). The tenant can leave after 6 months with 30 days written notice. The landlord cannot terminate the contract during the minimum period unless the tenant breaches the agreement.

Fianza (deposit)

The landlord can require a fianza of one month's rent for residential leases. This deposit must be deposited with the regional government's deposit scheme (varies by autonomous community). In addition to the fianza, the landlord may ask for additional guarantees (garantías adicionales) of up to two months' rent. The fianza must be returned at the end of the lease, minus any documented damages.

Rent increases

During the contract, annual rent increases are limited. Since 2023, rent increases have been capped at a reference index set by the INE (Instituto Nacional de Estadística), replacing the previously used CPI. This cap was introduced to limit rent inflation.

Zonas tensionadas

The 2023 housing law introduced the concept of zonas tensionadas (stressed rental zones). In these areas, additional rent controls apply. Landlords who are large holders (10 or more properties) face stricter caps on rent increases for new contracts. The designation is made by the autonomous community and applies to specific municipalities or districts where housing costs are deemed excessive.