Property rental in Andorra: from rigidity to flexibility

Reading time: 9 minutes

🏁 Introduction

For decades, the rental system in Andorra has been one of the most dynamic and sensitive legal areas of its internal economy.
The first regulatory frameworks — such as the 1993 Urban Property Lease Act and its 1999 reform — established long, inflexible contractual relationships with severe penalties for tenants.

Over time — and particularly after the housing crisis — the Andorran legislator has progressively reduced the rigidity of the system to encourage mobility, legal security and a more flexible market.

Today, tenants can ✅ terminate their contract with a simple 30-day notice, a significant change compared to the historical requirement of three months’ notice or compensation for each remaining year.

This article reviews how this change came about, the key differences between residential and commercial leases, and the essential aspects to consider before signing or ending a rental agreement.

🛡️ From initial rigidity to landlord protection

The 1993 law was the first to establish a comprehensive framework for urban leases, clearly distinguishing between residential properties and commercial premises. The system was clearly designed to protect landlords:

• Contracts automatically ended at the expiry of the agreed term.
• Tenants wishing to terminate early had to compensate one month’s rent for each remaining year.
• Many contracts were tacitly renewed for long periods, offering tenants little flexibility.

The 1999 reform introduced some modernisation but kept this philosophy. Although it set a legal minimum of five years for housing, it still required ❗three months’ notice and allowed significant penalties for early termination.

Commercial premises remained subject to a stricter regime, with compensation of one month’s rent per remaining year and contract durations of up to seven years.
The aim was to ensure business stability, but at the cost of limiting entrepreneurs’ freedom of movement.

🔄 Recent legal developments: the arrival of the 30-day notice

The shortage of housing and rising prices prompted a series of reforms to rebalance the system.
The turning point came with Law 15/2022, on measures to address the housing emergency, which introduced a structural change: any tenant may withdraw from the contract with at least 30 days’ notice.

This framework was consolidated by Law 24/2023, on promoting and stabilising the rental market, confirming that this rule is also applicable to earlier contracts, even when they contained more restrictive clauses.

Since 2023, most residential leases can be terminated without waiting months or paying disproportionate penalties.

This change seeks to provide flexibility and legal certainty, allowing tenants to adapt to professional or personal changes without facing legal disputes.

At the same time, landlords remain protected by the right to receive full rent until the end of the notice period.

🏢 Commercial premises: a specific and stricter regime

While residential leases have become increasingly flexible, commercial premises still follow a stricter system.

Under the model inherited from the 1999 law, still applied in practice, early termination by the tenant ⚠️ remains subject to compensation equal to one month’s rent per remaining year of contract.

This is justified by the business nature of these leases, which often require upfront investments in renovations, fittings or equipment that deserve a minimum protection period.

Unlike residential tenants, commercial lessees are considered to have greater bargaining power and risk awareness, and therefore do not require the same level of legal protection.
For this reason, the short notice period does not automatically apply to commercial leases, unless it has been expressly agreed in the contract.

🔏 What can be freely agreed — and what cannot

The current Andorran framework combines contractual freedom with certain mandatory limits.

May be freely agreed:

• The presence of pets, provided they cause no nuisance or damage.
• The allocation of expenses and utilities (water, electricity, heating, maintenance).
• The inventory of furniture or equipment, as well as additional insurance.
• The payment frequency.
• ⚠️ The initial duration of the lease, provided it is at least five years for primary residences.

May not be freely agreed:

• Deposits exceeding the legal maximum (two months’ rent under Article 15 of the 1999 law, previously three).
• Rent increases exceeding the consumer price index (CPI) when the contract is subject to rent control.
• Clauses limiting basic rights such as peaceful enjoyment, essential repairs or minimum habitability.

It is also illegal to include penalties that contradict the mandatory provisions on contract duration or notice.

🧑‍💼 Review before signing — and before terminating

Despite the simplification of the general framework, each contract may contain specific provisions that affect the balance between the parties.
It is common to find outdated clauses, especially in automatically renewed contracts.

Before signing — or ending a lease — it is essential to:

• Review the notice clause and confirm compliance with current law (30 days for housing).
• Check for hidden penalties, such as withheld deposits or prepaid rent.
• Ensure that rent increases are correctly calculated according to the consumer price index.
• Verify that the property holds a valid certificate of habitability, without which the contract may be void or unenforceable.

A careful legal review can prevent disputes and ensure that the lease is fully valid under Andorran civil law.

Conclusion

The evolution of the rental regime in Andorra reflects a shift from a rigid, protectionist model to a more balanced framework where legal certainty and freedom of decision play a key role.

The 30-day notice period has introduced flexibility aligned with today’s social realities, although commercial leases and certain older contracts retain specific regimes.

This flexibility forms part of a broader evolution of the housing sector, where the relationship between supply, demand and pricing has significantly shaped the Andorran market.
You can learn more in Andorran's real estate market (2019–2025): prices, new developments and housing access, which analyses how legislation and recent economic trends have redefined market balance.

👉 At ELYSIUM, we recommend having every lease contract reviewed by a specialised professional to ensure compliance with current regulations and avoid financial or legal risks.

If you wish to receive a personalised analysis or present your situation, please fill in the contact form, and our team will respond confidentially and adapt the advice to your case.

Last reviewed: October 2025