Renting a Flat in Madrid: Contract Length, Fees and Documents
How a long-term Madrid lease works under the Ley de Arrendamientos Urbanos after the October 2026 decree: duration, deposits, rent updates, who pays the agency and what landlords ask you to show.
Renting a flat in Madrid as your main home means signing a contract under the Ley de Arrendamientos Urbanos (LAU, Spain’s urban leases law). You can stay at least 5 years, or 7 if the landlord is a company. You pay one month’s deposit, at most two months of extra guarantee, and no agency fee, as of November 2026.
What does a Madrid rental contract guarantee?
The LAU sets minimum rights that a contract cannot take away. The parties agree on a term, but if it is shorter than five years (seven with a company landlord), the contract renews every year at your option until that minimum is reached. You can leave earlier: after six months, with at least 30 days’ written notice and no penalty.
When the minimum period ends, the lease rolls over for up to three more years, one year at a time, unless the landlord gives at least four months’ notice or you give at least two. The full text is in the consolidated LAU on the BOE, which shows every recent change.
The rules moved several times in autumn 2026. Real Decreto-ley 29/2026, in force since October 8, 2026, was validated by the Congress’s standing committee on November 12, 2026. A separate decree that would have made renewals automatic (Real Decreto-ley 28/2026) was rejected the same day, so the renewal rules above still apply.
How much can the rent go up each year?
Rent can only be updated once a year, on the contract anniversary, and only if the contract contains an update clause. Without one, the rent stays the same. The ceiling is the Índice de Referencia para la Actualización Anual de los Contratos de Arrendamiento de Vivienda (IRAV), a rental index published monthly by INE. INE’s August 2026 figure was 2.47%.
Until December 31, 2027, an extra limit applies under the October 2026 decree:
- If your rent is already above the state reference price for the flat, no increase is allowed.
- In other cases, the increase is what you and the landlord agree, within the IRAV.
- If you do not agree, the increase cannot exceed 2%.
The landlord must notify the update in writing, stating the percentage. A note on the previous month’s receipt counts as notice.
Who pays the agency fee and other costs?
The landlord does. Since the 2023 Housing Law, agency and contract-preparation costs cannot be passed on to the tenant “directly or indirectly”, and that includes renewals. Any optional extra service can only be charged if you asked for it in writing after being told its cost. Property taxes such as IBI stay with the owner. Community fees can be passed on only if the contract says so in writing and states the yearly amount.
| Payment | Rule as of November 2026 |
|---|---|
| Legal deposit (fianza) | One month’s rent, lodged by the landlord with the Comunidad de Madrid |
| Extra guarantee | Up to two months’ rent on contracts of up to 5 or 7 years |
| Unpaid-rent insurance | The landlord cannot require you to take it out |
| Agency or contract fee | Paid by the landlord |
| First month’s rent | Usually paid on signing |
Our guide to rental deposits in Madrid explains how the fianza is lodged and returned.
Which documents do Madrid landlords ask for?
There is no official list, so requests vary. Most landlords and agencies ask for:
- Your passport or ID and, if you have one, your NIE (foreigner’s identity number). See how to get an NIE in Madrid.
- Recent payslips and an employment contract, or for freelancers the last tax returns.
- Bank statements or proof of savings if you are new to Spain.
- Sometimes a guarantor (aval), usually within the two-month cap on extra guarantees.
Keep the signed contract. You will need it to register your address on the padrón and for most residency paperwork.
How do you spot a rental scam?
Most fake listings follow the same script. Walk away if you see these signs:
- The owner is “abroad” and cannot show the flat, but will send keys after a transfer.
- You are asked for a deposit or “reservation” before a viewing or before seeing a contract.
- The price is far below other listings in the same street.
- The advertiser refuses to show the owner’s identity or a recent land registry extract (nota simple).
- Payment is requested by money transfer services or crypto rather than to a Spanish bank account in the owner’s name.
A nota simple from the Land Registry costs a few euros and shows who owns the property. It is the simplest check before you pay anything.
Is a temporary contract the same as a long-term lease?
No. Many Madrid listings offer contracts of a few months. Since October 8, 2026, a temporary contract needs a real reason you are away from your usual home, stated in the contract, and generally cannot exceed 12 months. If there is no genuine reason, the law treats it as a normal long-term lease from the start. The details are in seasonal vs long-term rentals in Madrid.
Bottom line
Before signing, ask for the contract by email and read the update clause, the guarantee amount and who pays community fees. Pay nothing until you have seen the flat and checked the owner’s name on a nota simple. If a dispute looks likely, keep every message in writing; that is what counts later.
FAQ
Can a Madrid landlord ask for six months up front?
Not as a guarantee on a standard lease. The legal deposit is one month and extra guarantees are capped at two months on contracts of up to five or seven years. Paying rent in advance by agreement is a separate matter, so read what the contract calls each payment.
Can I leave before the contract ends?
Yes, after six months, with at least 30 days’ written notice. Since the October 2026 decree, the LAU says leaving this way gives the landlord no right to compensation. Contracts signed earlier may contain a penalty clause, so check with a lawyer if yours does.
Is there a rent cap in Madrid?
There is no cap on the starting rent, because the Comunidad de Madrid has not declared any tensioned rental areas as of November 2026. Annual increases on existing contracts are limited, as explained above.
Where can I get free advice?
The Comunidad de Madrid’s consumer service publishes rental guidance, and the Madrid Bar Association runs a legal orientation service. For a specific dispute, check with a lawyer or a tenant association.
