Stressed rental areas: why they do not apply in the Madrid region and what does

The 2023 Housing Act allows «stressed residential market areas» (zonas tensionadas) to be declared, where rents are capped and tenants have more rights. But it is the regional government that has to request it.

Other regions have already done so, including Catalonia and the Basque Country. The Community of Madrid has chosen not to: it considers it would reduce the supply of rental housing and challenged the law before the Constitutional Court. As of today no municipality in the Madrid region has been declared a stressed area.

This matters because much of the news about rent caps refers to rules that only apply in those areas, and they do not apply in Madrid.

In a stressed area, these rules apply above all:

• Rent containment in new contracts: the rent cannot exceed that of the previous contract. If the landlord is a large owner, it cannot exceed the Ministry's reference index (SERPAVI) either.
• A large owner is someone with more than 10 homes, or more than 1,500 m² of residential space; in a stressed area the region can lower the threshold to 5.
• Extraordinary extension: when the contract ends, the tenant can ask to stay for up to three more years, in annual periods, with some exceptions.

None of this applies today in the Community of Madrid.

Even without stressed areas, the Housing Act changed rules that apply throughout Spain:

• Agency fees and the costs of drawing up the contract are paid by the landlord, not the tenant. If you are charged them, you can claim them back.
• The deposit is one month's rent, and any additional guarantees that can be requested cannot exceed two months' rent.
• In contracts signed since 26 May 2023, the annual increase is capped by the INE reference index (IRAV), which is currently well below the CPI.
• The minimum term is still five years, or seven if the landlord is a company, plus up to three years of annual extensions if nobody gives notice.

For landlords, the other side: in Madrid you set the rent for a new contract freely, but must respect those rules in everything else.

Yes. The Community would only need to request it, and the Government has tried several times this year to approve similar measures by decree for the whole country, although Parliament struck them down. It is worth reviewing contracts every time the rules change.

If you are going to sign, renew or update a lease, in the first consultation, which is free, we review which rules apply to your case.

Further reading: what still applies after the repealed rent decrees and what to check in your rental contract in Madrid.