Navigating California's AB 723
The rules for real estate photography and AI media: what you can edit, what to disclose, what to leave alone, and what's at stake.
What is AB 723?
The real estate industry has undergone a visual revolution. With AI and digital editing software, transforming an empty, dreary room into a beautifully lit, virtually staged masterpiece takes only a few clicks. These tools are fantastic for marketing, but they have also blurred the line between showcasing potential and misleading buyers.
Dubbed the “Altered Image Law,” California Assembly Bill 723 was signed into law (Chapter 497, Statutes of 2025) and took full effect on January 1, 2026. It changes how real estate professionals, property managers and photographers in California use digitally altered images in advertising.
At its core, AB 723 is a truth-in-advertising and consumer protection law codified in California Business and Professions Code section 10140.8. Supported by consumer advocacy groups, it responds to complaints from homebuyers who felt “catfished” by properties that looked drastically different in person than online.
Any time a real estate licensee, or someone acting on their behalf, uses a digitally altered image to advertise a property for sale or lease, they must conspicuously disclose the alteration and provide access to the original, unaltered image.
What you can and can't edit
AB 723 doesn't ban creative real estate photography, and it doesn't forbid virtual staging. It separates routine enhancements from alterations that change what a buyer would see in person. In practice, edits fall into three groups.
Standard enhancements and temporary clutter
Corrections that show the property accurately, plus small items that leave with the seller.
- Exposure, lighting and white-balance corrections
- Color correction, sharpening and noise reduction
- Straightening verticals, cropping and minor angle fixes
- Cords, cables and trash cans
- Small personal items and clutter
- A few moving boxes, when you know what's behind them
You can make the property look better, but not different.
Material alterations
Edits that add, remove or change what a buyer would see in person. These need a label and the original photo.
- Virtual staging: adding furniture, rugs or decor
- Removing furniture (a gray area; treat it as altered)
- Sky replacement (some MLSs now ban it outright)
- Removing power lines or neighboring structures
- Adding green grass or changing exterior views
- Any edit made with a one-click generative AI tool
If a buyer would notice the difference at the showing, disclose it.
The property's actual condition
These describe the home itself. Editing them crosses from marketing into misrepresentation, label or not.
- Appliances
- Built-in light fixtures and plumbing fixtures
- Flooring and carpet
- Paint colors
- Cracks, mold, stains or other damage
- Walls, windows and other architectural features
- A whole wall of boxes, when you can't see the floor behind it
If it conveys with the house or affects its condition, leave it alone.
The exact lines vary by MLS, and some are stricter than the state law. When an edit falls in the middle group, check your MLS rules before the listing goes live.
How to comply: the 2-step rule
If you use a digitally altered image in your marketing, you must meet two parallel obligations.
- 01Label the image clearlyPut a conspicuous statement directly on or next to the image saying it has been digitally altered. Labels like “Digitally Altered,” “Virtually Staged” or “AI Enhanced” are generally acceptable as long as they are clear to consumers.
- 02Provide the original photoBuyers must have a way to see the before image. Online (MLS, websites, Zillow), post the unaltered version directly alongside the altered one, usually immediately before or after it in the gallery. In print (flyers, mailers, magazines), include a link, URL or QR code to a publicly accessible page that shows the original, unedited photos.
Major California multiple listing services, including CRMLS and SDMLS, have updated their rules (such as CRMLS Rule 11.5.2) to enforce these same standards.
The hidden risk in one-click AI edits
Not all editing tools carry the same risk. Generative AI editors don't just remove the object you point at: they produce a new image from your photo. Along the way they can quietly shift a paint color, drop a light fixture or reshape a window, which turns a simple cleanup into a material alteration nobody meant to make.
Tone, color and crop adjustments in tools like Lightroom and Photoshop carry far less of that risk, and a manual healing brush only touches what you paint over. The same caution applies after delivery: an agent who runs a listing photo through ChatGPT or another AI app can create a disclosure problem without realizing it.
Whatever tool you use, compare every AI-edited image with the original before it goes on the MLS.
What it means for photographers
Photographers, virtual stagers and media agencies need delivery workflows that support their clients' compliance:
- Deliver dual sets: always provide both the original, unaltered files and the virtually staged or altered files.
- Use clear file names: distinct names such as
Kitchen_Original.jpgandKitchen_VirtuallyStaged.jpghelp agents avoid uploading the wrong file. - Keep a paper trail: keep raw files, make removals on separate layers, and save layered PSD or TIFF files, so you can show the original next to every edit if a buyer, agent or MLS ever asks.
- Use Content Credentials: Photoshop can attach edit history to exported files using the open C2PA standard.
- Label altered images: many delivery platforms can automatically stamp “Digitally Altered” on virtually staged images.
- Offer dedicated galleries: for print, provide a link or QR code to an unedited gallery that agents can drop into flyers.
Beyond California
California was first, but it isn't alone. Arizona, Minnesota, Florida and Wisconsin are adopting new laws or strict MLS guidelines on altered listing photos, and Wisconsin has a law similar to AB 723 set to take effect in 2027. Across the country, virtual staging almost always requires some form of disclosure.
Building the habits above now means you won't have to rebuild your process under deadline when the rules reach your market.
Penalties for non-compliance
Because AB 723 falls under the California Real Estate Law, willful violations are a public offense punishable by fines of up to $1,000 and/or county jail time. Beyond the statutory penalties, non-compliance can lead to:
- MLS fines: immediate fines and violations from your local MLS.
- DRE disciplinary action: the Department of Real Estate can investigate and penalize your license.
- Civil lawsuits: serial litigants and angry buyers can sue for misrepresentation or fraud if they feel deceived by listing photos.
Transparency as a strategy
AB 723 might look like extra paperwork, but the smartest agents treat it as a competitive advantage. When consumers are increasingly skeptical of fake online content, radical transparency builds trust.
When you clearly label a photo and say, “We virtually staged this room to help you imagine its potential,” you're not just complying with the law. You're positioning yourself as an honest, reliable guide through the sale.
References and sources
- California Assembly Bill No. 723 (Chapter 497, Statutes of 2025): amends Business and Professions Code section 10140.8 regarding digitally altered images.
- California Regional Multiple Listing Service (CRMLS): Rule 11.5.2 on digitally altered images requires clear labeling and access to original photos.
- California Department of Real Estate (DRE): advertising guidelines and truth-in-advertising enforcement.
- Consumer Federation of California: supported AB 723 to address consumer deception in real estate marketing.
- Alex Cooke, “What Can You Legally Remove From a Real Estate Photo?,” Fstoppers, October 2026, summarizing photographer Nathan Cool's guidance on removals, AI editing tools and rules in other states.