What is the LAU?
The LAU (Ley de Arrendamientos Urbanos), Law 29/1994, is the Spanish state statute that governs leases of urban dwellings and premises: it distinguishes primary-residence rentals, seasonal rentals, and tourist use, and fixes minimum terms, deposits, tenant rights, and landlord limitations.
The LAU has been the cornerstone of Spanish tenancy law since 1994 and has undergone deep reforms in 2019 (RDL 7/2019) and 2023 (Law 12/2023 on the Right to Housing). Its article 2 governs primary-residence leases ("vivienda"), article 3 governs seasonal leases ("use other than dwelling"), and article 5 expressly excludes tourist rentals, which fall under regional (autonomous) regulation.
For primary residences (art. 2), since RDL 7/2019 the contract is mandatorily extended up to five years when the landlord is an individual and up to seven years for a legal person (art. 9 LAU). Once that mandatory extension ends, art. 10 provides for tacit annual renewal up to a maximum of three more years. The statutory deposit is one month for dwellings and two months for other use (art. 36).
Law 12/2023 introduced the "tensioned residential market zone" concept: in zones declared by the autonomous community, art. 2 contracts are subject to rent-increase limits per the state index and, for large landlords (default >10 urban residential properties, reducible to 5+ in specific tensioned zones), to a cap on new rents. Art. 3 (seasonal) and art. 5 (tourist) remain outside this regime.
The property's cadastral reference has been mandatory in the fianza deposit registration with the autonomous community since RDL 7/2019 (LAU Additional Provision 3). LAU itself does not expressly require it in the contract proper, but inclusion is strongly recommended: it eases registry entries and tenant tax deductions.
Why it matters
Confusing the applicable regime (art. 2 vs. art. 3 vs. art. 5) is the most frequent cause of disputes between host and guest in Spain. The LAU defines durations, deposits, extensions, and tenant rights with direct impact on your cash-flow and ability to recover the property. Every contract decision ultimately points to a specific LAU article.