Assembly Bill 723

AB 723, also known in the industry as the Altered Image Law, establishes new transparency requirements for real estate advertising in California. The bill aims to protect consumers from being misled by “virtual staging” or AI-generated enhancements that misrepresent the actual condition of a property.

Main Requirements

• Mandatory Disclosure: Real estate brokers, salespersons, or their representatives must include a conspicuous disclosure on or adjacent to any image that has been digitally altered.
• Transparency in Listings: If a digitally altered image is posted on a website controlled by the broker or salesperson, they must also provide the original, unaltered version of the image or a direct link (URL/QR code) to it.
• Accurate Representation: The law ensures that while agents can use “virtual staging” to show potential, the consumer must be able to see the property’s current state.

What Counts as “Digitally Altered”?

The law defines a “digitally altered image” as one modified using software or Artificial Intelligence to add, remove, or change elements of the real property, including:

• Furniture and fixtures
• Flooring and paint colors
• Landscaping and exterior features
• Views from windows or surrounding street features

Excluded Adjustments

Standard professional photography edits do not require disclosure, provided they do not change the physical condition of the property. These include:

• Adjusting lighting, brightness, and contrast
• Sharpening and white balance
• Color correction and exposure
• Cropping, straightening, and angle adjustments

Compliance & Enforcement

Violations of these disclosure requirements are treated as a public offense and can lead to disciplinary action against a real estate license by the Department of Real Estate (DRE). The law aligns with existing ethical standards requiring real estate professionals to provide a “true picture” in advertising.