Law Advocate Group, LLP 
What Real Estate Agents, Brokers, and Developers Need to Know
Beginning January 1, 2026, California’s new Assembly Bill 723 (AB 723) will officially reshape how real estate professionals can use AI-generated and digitally enhanced property photos in advertising. This important update, codified in Business and Professions Code § 10140.8, was approved on October 10, 2025. It aims to promote truth in advertising, ensuring that homebuyers see accurate visual representations of listed properties.
Signed into law as Chapter 497, Statutes of 2025, the change becomes effective January 1, 2026, giving real estate professionals a transition period to revise marketing materials.
What Assembly Bill 723 (AB 723) Regulates: “Digitally Altered” vs. “Edited” Images
The intent of AB 723 isn’t to discourage professional photography. Instead, it aims to prevent misleading visual representations that materially change how a property appears. The law sets out two distinct categories: images requiring disclosure and images not requiring disclosure.
Images That Require Disclosure
A disclosure is required if the image has been digitally modified using photo-editing software or artificial intelligence to add, remove, or change physical elements of the property.
This includes edits such as:
- Adding or removing furniture, fixtures, appliances, or flooring
- Changing paint colors, landscaping, or building exteriors
- Altering views, neighboring structures, or street features visible from the property
- Using virtual staging or AI tools that create a representation of items that don’t actually exist in the home
Essentially, any enhancement that changes the property’s condition or layout triggers a disclosure requirement.
Images That Do Not Require Disclosure
Under the revised law, agents are free to make standard photo edits that simply improve clarity or accuracy without changing the substance of the property.
The law explicitly allows for:
- Lighting or exposure corrections
- Color or white-balance adjustments
- Image sharpening or straightening
- Cropping, resizing, or angle adjustments
Rule of thumb: You can make the property photo look better, but not different.
Disclosure Requirements for Brokers and Agents
If an image qualifies as “digitally altered,” the agent or broker must follow these steps:
- For All Advertising (Print and Digital) – Include a clear and conspicuous statement directly on or next to the photo, stating that the image has been digitally altered.
- For Print Advertising (Flyers, Mailers, Magazines) – Along with the disclosure statement, provide a link, URL, or QR code that takes viewers to a publicly accessible page showing the original, unaltered photo, labeled as such.
- For Online Advertising (MLS, Brokerage Websites, Social Media) – Licensees who control the platform can either:
- Follow the print rule (add a disclosure and link/QR code), or
- Simply post the unaltered and altered versions side-by-side, clearly labeled “Digitally Altered” and “Original – Unedited.” This option is typically the easiest way to comply when posting on MLS systems or broker-managed websites.
Best Practices for Real Estate Compliance in 2026
To prepare for AB 723’s rollout on January 1, 2026, brokers and real estate marketing teams should adopt the following strategies for print campaigns, online listings, and virtual staging.
For Online Listings:
When using virtual staging or digital enhancements, real estate professionals should exercise caution to avoid any form of false or misleading advertising. While it is acceptable to digitally modify non-structural elements such as furniture, décor, or fixtures, agents and brokers must not alter the property itself, including interior or exterior features, landscaping, or surrounding views, in a way that could misrepresent the true condition of the property.
If an image is edited to show a possible improvement or renovation, always include a clear and conspicuous notice explaining the change. You should also:
- Upload both original and digitally altered photos directly to your MLS or firm website.
- Use captions such as:
- “Digitally Altered” or “Virtually Staged”
- “Original Photo” or “Unedited”
For Print Campaigns:
Print campaigns should also follow the same principles as online listings, and can avoid false or misleading advertising by:
- Create a dedicated online gallery for each property containing all original, unaltered photos.
- Generate a QR code that links directly to that gallery.
- Include the required disclosure text on altered images (e.g., “Image digitally enhanced—scan QR code to view original.”)
For both print and online listings, ensure before-and-after versions are visible in the same gallery or listing section for full transparency.
Broker Tip: Many MLS providers, including CRMLS and PSAR, are currently evaluating streamlined compliance procedures. Always check your brokerage’s internal policy for listing-specific guidance.
Why the New 2026 Real Estate Advertising Law Matters
Consumer advocacy groups, including the Consumer Federation of California, supported AB 723 to address rising complaints about misleading real estate photography. With AI and virtual staging becoming commonplace, many buyers reported feeling tricked or misled when a property appeared dramatically different in person than online.
The new law aims to rebuild consumer trust by ensuring that listings accurately reflect a property’s real-world condition, benefiting both buyers and ethical real estate professionals.
While licensees have long been prohibited from making false or misleading statements under Bus. & Prof. Code § 10140, AB 723 supplements that by targeting the specific emerging risk of AI or digitally staged images in the listing marketplace.
Key Takeaways for Real Estate Professionals
- Effective Date – January 1, 2026
- Applies To – Real estate agents, brokers, developers, and marketing staff involved in property advertising
- Main Rule – Any AI-generated or materially edited photo must include a clear disclosure and access to the original version
- Goal – Promote accurate, transparent real estate marketing and reduce consumer deception claims
Disclaimer
This article provides general information about California Assembly Bill 723 and the new 2026 real estate advertising laws. If you are looking for legal advice on how AB 723 can affect you or your business, contact a real estate attorney at our firm today.
