The legal and economic context of Royal Decree-Law 8/2026
The war in Iran has triggered an unprecedented energy crisis, the impact of which on energy prices has led to a widespread rise in inflation. This economic context has severely affected the rental market, making it difficult for thousands of Spanish families to access housing. In light of this situation, the Government has adopted urgent measures aimed at ensuring that rental costs do not exceed 30% of average household income, particularly in areas identified as under pressure residential markets.
In this regard, at Belzuz Abogados, S.L.P., we offer specialist advice for landlords and tenants who need to adapt to the new legal provisions.
Extraordinary extension of tenancy agreements
One of the most significant measures of Royal Decree-Law 8/2026 is the extraordinary extension of tenancy agreements for primary residences governed by Law 29/1994 of 24 November on Urban Tenancies. This provision stipulates that contracts due to expire before 31 December 2027 may be extended for annual periods up to a maximum of two additional years.
The extension must be expressly requested by the tenant and must be accepted by the landlord, unless exceptional circumstances provided for in the regulations apply, such as the landlord’s need to occupy the property. During the extension period, the essential terms and conditions of the current contract remain in force, guaranteeing the tenant’s housing stability.
It is important to note that this extraordinary extension will not apply if the parties agree on other terms or conditions or if a new tenancy agreement is signed. Furthermore, the regulation stipulates that this extension is incompatible with the extension provided for in Article 10.3 of the Urban Leases Act (extensions for properties in areas with a tight housing market), which shall take precedence if it has already been activated.
Exceptional limit on rent increases
Another key measure introduced by Royal Decree-Law 8/2026 is the limit on the annual rent increase for tenancy agreements for the principal residence. If the annual rent review falls between the date of entry into force of the decree and 31 December 2027, the rent increase may not exceed 2% per annum, even in the absence of agreement between the parties.
This limit is particularly relevant for landlords classified as large property owners, as defined in Article 3.k) of Law 12/2023 of 24 May, who must apply the 2% limit as a mandatory requirement. In the case of landlords who are not large property owners, the limit will apply only in the absence of an agreement between the parties.
The measure aims to protect tenants from disproportionate rent increases in a context of high inflation, ensuring greater economic stability and facilitating access to housing in a tight market.
If you are a landlord or tenant and need guidance on how to apply these restrictions to your contracts, please do not hesitate to contact Belzuz Abogados, S.L.P., where our experts in Commercial Law will offer solutions tailored to your needs.
Challenges and opportunities for landlords and tenants
Royal Decree-Law 8/2026 presents a series of challenges and opportunities for the parties involved in residential tenancy agreements. On the one hand, tenants benefit from the extraordinary extension, which guarantees them continued use of the property during a period of economic uncertainty. Likewise, the cap on rent increases provides them with greater predictability in their expenses, preventing excessive rises that could jeopardise their financial stability.
On the other hand, landlords may also find advantages in this legislation. The extraordinary extension may reduce tenant turnover, ensuring stable income during the crisis period. Furthermore, the possibility of renegotiating contracts with new terms adapted to the economic context may prove beneficial for both parties.
However, these measures also entail certain risks. For tenants, in high-demand areas where rents are already high, the 2% cap may be insufficient to guarantee affordable housing. Likewise, the extraordinary extension may limit the ability to negotiate more favourable contracts in the future.
For landlords, restrictions on rent increases, particularly for large property owners, could lead to financial losses in a context of high inflation. Furthermore, the obligation to accept the extraordinary extension limits contractual freedom and the ability to reclaim properties if necessary.
Current status of the Royal Decree-Law
As this is legislation in the form of a Royal Decree-Law, it is essential that it be ratified by Parliament for the new regulations to remain in force. To date, neither such ratification nor, where applicable, the repeal of the Royal Decree-Law has taken place, which means that the new regulations covered by this article remain subject to whether or not they are ratified.
During this period of validity prior to its ratification or repeal, any extensions or updates requested or agreed between the parties shall be valid. If the Royal Decree is ratified, it shall remain in force as established; if it is repealed, only the conditions agreed upon up to that point shall remain valid.
Conclusion
Royal Decree-Law 8/2026 constitutes a necessary legislative response to mitigate the consequences of the war in Iran on the market for the rental of primary residences. Whilst it offers significant opportunities to ensure the economic stability of tenants, it also poses challenges for landlords, particularly regarding rent caps and the obligation to accept extraordinary extensions. Notwithstanding the fact that, as mentioned, it is still pending ratification in Parliament.