Rental Contract Expiring: Your Rights as a Tenant on Mallorca

In the Balearics, 2026 is the year of expiring rental contracts: thousands of long-term contracts signed after the 2019 rental law reform are reaching their end. If you want to know whether your rental contract on Mallorca can be extended, which notice periods apply and what the landlord may demand in a new contract, you will find the answers here. The basics of Spanish rental law are covered in our guide to rental contracts in Spain - this post focuses on what happens when the contract ends.

At a glance

Under the LAU, residential rental contracts in Spain extend automatically to at least 5 years (7 years when the landlord is a company) and after that by up to 3 more years if nobody gives notice in time. The landlord must announce non-renewal 4 months before expiry, you as the tenant 2 months. In the Balearics the deposit is held by IBAVI and must be returned within one month of handing back the keys.

Why so many rental contracts in the Balearics expire in 2026

According to the Balearic social affairs and housing department, around 24,500 rental contracts expire in the Balearics in 2026, affecting roughly 69,000 people. For a new contract at current market prices, the authority expects average extra costs of about 4,600 euros per household per year. The reason for the wave: the rental law reform of March 2019 extended the minimum term to 5 plus 3 years. Many contracts signed back then are now reaching their end at the same time.

For you as a tenant this means: you are not alone in this situation, and the market is tight. All the more reason to know your rights before the landlord turns up with a new draft contract. Our overview of rental prices on Mallorca in 2026 shows what apartments currently cost.

Renewal under the LAU: 5 years plus 3

Spanish residential rental law is set out in the Ley de Arrendamientos Urbanos (LAU). There are two mechanisms you need to know:

The prórroga obligatoria is the mandatory statutory extension of a Spanish residential rental contract: whatever term is written in the contract, you can extend it year by year up to at least 5 years (7 years if the landlord is a company). Only you decide whether to use those years in full.

After that comes the prórroga tácita, the tacit renewal:

If neither side gives notice in time, the contract renews automatically for 1 year at a time, up to 3 times.
The landlord must tell you at least 4 months before expiry that he does not want to renew.
You as the tenant must give notice at least 2 months ahead if you want to move out.
During the tacit renewal, all contract terms continue unchanged, including the rent (plus the permitted index adjustment).

Important: these rules apply to contracts signed on or after 6 March 2019. Older contracts have shorter periods (3 plus 1 years). The contract date is what counts, not the move-in date.

Notice and landlord repossession: these deadlines apply

At the end of the contract, knowing your deadlines makes the difference between staying in control and suddenly having to move out. The most important situations:

The landlord does not want to renew

He must tell you in writing at least 4 months before the 5 (or 7) years are up. If he misses the deadline, the contract extends automatically by another year.

You want to move out

Tell the landlord in writing at least 2 months before the contract ends. During the term you can also end the contract at any time after 6 months with 30 days of notice (desistimiento).

The landlord claims the home for personal use

Only possible if he is a private individual, the first contract year is over and the clause is in the contract. He must need the home for himself or close family members and give 2 months of notice.

Careful: always serve notice in a verifiable way

A remark in the stairwell does not count. Always give notice, and respond to notice, in writing with proof of delivery, in Spain usually by burofax through Correos. In court disputes the outcome often turns on a single question: who can prove what was communicated, and when.

If the landlord only claims personal use as a pretext to re-let at a higher price, you are entitled to move back in or to be compensated if the home is not occupied within 3 months of the termination.

Getting your deposit back: deadline and process

The statutory deposit (fianza) for residential lets is 1 month of rent. In the Balearics the landlord must lodge it with the housing institute IBAVI, not keep it in his own account. After you hand back the keys he has 1 month to return the deposit. After that he owes you statutory default interest.

To make the return go smoothly:

Document the state of the home at move-in and move-out with photos and a handover protocol.
Normal wear and tear (signs of use, faded walls) must not be deducted from the deposit.
Get the key handover confirmed in writing, because the one-month period runs from that date.
If the landlord is late, demand the deposit by burofax before you think about going to court.

Rent increases in a new contract: what is allowed

Within a running contract, the annual adjustment is capped: for contracts under the 2023 housing law, the reference index IRAV has applied since 2025, published monthly by the statistics institute INE. It regularly sits below the inflation rate. Older contracts follow the index clause agreed in the contract.

But once the contract fully expires, the game starts over: for the follow-up contract the landlord may in principle set the rent freely, because the Balearics have so far not declared any zonas tensionadas with rent caps. Negotiating is still worth it. A solvent existing tenant with no vacancy and no agency fees is worth more to many owners than an unknown new tenant at the highest price.

Can the landlord raise the rent as much as he wants after the contract ends?

For a genuine new contract, yes: freedom of contract applies as long as no rent cap has been declared for the zone. But as long as your contract is only renewing tacitly (prórroga tácita), the old rent stays in place and may only rise by the permitted index adjustment.

Tip: raise the renewal early

Do not wait for the landlord to write to you. If you start the conversation 6 months before expiry, you negotiate without time pressure and can trade a moderate increase for a longer term. If it does come down to moving, our guide to renting an apartment on Mallorca walks you through the search.

Conclusion

An expiring rental contract on Mallorca is not an automatic eviction. Up to the limit of 5 plus 3 years it is largely you who decides whether the tenancy continues, and the landlord is bound by clear deadlines: 4 months for him, 2 months for you. First check the contract date, then count the renewal years already used, and respond to any notice in writing by burofax. The deposit is held by IBAVI and must be back one month after you return the keys. And if the landlord demands a drastic increase: check whether he is even allowed to yet, and for large amounts get legal advice before you sign.