Spain’s rental sector has been thrown into confusion after a bombshell Supreme Court ruling confirmed that a tenant can stay in a rented home for as long as 30 years, provided the original contract included a clause allowing them to keep renewing it.
For thousands of landlords and tenants, this decision – STS 1387/2025, issued on 7 October – is far more than a technical legal debate. It reshapes what long-term renting can look like in Spain and gives unexpected new weight to certain clauses that many owners thought were little more than decoration.
A quiet dispute that ended up rewriting how rental contracts are understood
The case began when Naropa Capital S.L.U., a property investment firm, bought a residential building and took over the existing rental agreements. One of those contracts contained a clause that allowed the tenant to renew the lease indefinitely, with the tenant choosing when to leave – not the landlord.
Naropa argued that this kind of clause simply couldn’t coexist with the Ley de Arrendamientos Urbanos (LAU), claiming the law imposes limits that make ‘indefinite’ arrangements impossible. Their aim was clear: get the courts to strike the clause down.
They didn’t get what they hoped for.
A court in Burgos sided with the tenant.
The Provincial Court backed that decision but added a cap: 30 years, inspired by the rule on long-term usufruct in Article 515 of the Civil Code.
Naropa pushed the matter to the Supreme Court, insisting that no one had agreed to a 30-year term and accusing the lower courts of effectively rewriting the contract.
Instead, the Supreme Court doubled down.
Why the Supreme Court said the clause is valid – and why that changes so much
The Supreme Court’s reasoning revolves around a principle deeply rooted in Spanish contract law:
– parties can agree to whatever they want, so long as it doesn’t break the law.
The judges went through several key points:
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If both sides agreed to the clause, it stands
The Court leaned heavily on Article 1.255 of the Civil Code, which protects contractual freedom. According to the ruling, the clause wasn’t abusive, it wasn’t hidden, and it wasn’t imposed. Both sides signed the contract fully aware of what it contained.
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The LAU doesn’t forbid longer agreements
The LAU provides minimum protections but doesn’t prevent landlords and tenants from agreeing to longer terms.
If the clause is explicit and voluntary, there’s no legal barrier.
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A lease can’t last forever – hence the 30-year cap
To avoid creating a ‘perpetual contract’, the Court borrowed the 30-year limit from the Civil Code’s rules on usufruct.
This doesn’t rewrite the contract, the judges said – it simply prevents the agreement from turning into something legally unacceptable.
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No mistakes in the earlier rulings
The judges dismissed Naropa’s complaints and confirmed that both previous courts had acted correctly.
What this actually means for landlords and tenants across Spain
This decision may not rewrite the LAU itself, but it reshapes how existing contracts must now be interpreted.
For landlords
- If your contract includes a clause allowing indefinite renewal, the tenant may now legally rely on it.
- You may not be able to recover the property until the 30-year maximum is reached.
- Future contracts will need much tighter drafting to avoid similar situations.
For tenants
- Those lucky enough to have these clauses now enjoy stability rarely seen in Spain’s rental market.
- A change in property ownership does not weaken their rights – the clause binds the new owner too.
- They decide when to end the contract, not the landlord (up to 30 years).
In practice, this gives tenants a level of long-term protection many never expected to see validated by the highest court.
A ruling that could reshape Spain’s rental landscape
The Supreme Court’s decision doesn’t create new law – but it does create new legal certainty. Clauses once dismissed as symbolic or even unenforceable now carry real weight.
For landlords, it’s a wake-up call.
For tenants, it’s a lifeline.
For lawyers, it’s a new point of reference that will undoubtedly influence future disputes.
One thing is clear: Spain’s rental market won’t look quite the same after this ruling.