AB 723 Takes Effect, Cracking Down on Fake Listing Photos

California homebuyers can’t be duped by property listing photos thanks to a new state law.

Assembly Bill 723, which took effect Jan. 1, requires real estate agents and brokers to disclose when listing images have been digitally altered and to provide the original, unedited photos to shoppers for side-by-side comparison, the San Francisco Chronicle reported. Gov. Gavin Newsom signed the legislation into law in October.

The rule applies broadly, covering images in online listings, brochures and other promotional materials. It also reaches beyond brokerages to photography firms and Multiple Listing Services, which feed listings to portals like Zillow and Redfin. Under the law, the disclosure statement is necessary for “alterations that add, remove or change elements in the image, such as interior fixtures, furniture, appliances, flooring, walls, paint color, hardscape, landscape, facade, floor plans and exterior features on or visible from the property such as streetlights, utility poles, views through windows and neighboring properties.”

Bill author Rep. Gail Pellerin, who represents Santa Cruz, drafted the legislation after her former chief of staff drove an hour to a home she was looking to buy only to find that the kitchen featured in the listing photo did not exist, bearing just a range hood and no cabinets, countertops or appliances. The law is one of several ways state legislators are working to regulate the rapidly growing use of artificial intelligence, and follows a similar law passed in Wisconsin in December set to take effect next year.

“AI has made the barrier to entry very low,” Jeff Klein, managing director of Open Homes Photography, told the Chronicle of the growing practice of “virtual staging.” The issue lies with generative AI’s tendency to “hallucinate” images such as views from a room that doesn’t exist.

The law does not “establish a set penalty or fine for failure to disclose,” Pellerin told the Chronicle. “However, it would fall on the [California] Department of Real Estate to address any violation per their disciplinary process.”

The state’s Department of Real Estate could step in with penalties of its choosing. “Depending on the egregiousness, we could take corrective action, ranging from revoking a license to a slap on the wrist,” Stephen Lerner, the department’s assistant commissioner for legal affairs, said.

— Chris Malone Méndez