Navigating California's AB 723

Written By Juan P. Bermudez

The 2026 Rules for Real Estate Photography and AI Media

Published: March 2026 |

Category: Real Estate Law, Marketing & Technology

The real estate industry has undergone a visual revolution. With the rapid advancement of Artificial Intelligence (AI) and digital editing software, transforming an empty, dreary room into a beautifully lit, virtually staged masterpiece takes only a few clicks. But while these tools are fantastic for marketing, they have also blurred the line between showcasing potential and misleading buyers.

Enter California Assembly Bill 723 (AB 723).

Dubbed the "Altered Image Law," AB 723 was signed into law (Chapter 497, Statutes of 2025) and takes full effect on January 1, 2026. It fundamentally changes how real estate professionals, property managers, and real estate photographers in California use digitally altered images in their advertising.

Here is everything real estate pros and media creators need to know to stay compliant, avoid hefty fines, and build consumer trust.

What Is AB 723?

At its core, AB 723 is a truth-in-advertising and consumer protection law codified in the California Business and Professions Code (section 10140.8). Supported by consumer advocacy groups, the law was created to address rising complaints from homebuyers who felt "catfished" by properties that looked drastically different in person than they did online.

The law requires that 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.

Material Alterations (Disclosure Required)

AB 723 does not ban creative real estate photography, nor does it forbid virtual staging. Instead, it draws a strict legal line between standard photo enhancements and material alterations.

An image is considered digitally altered if photo-editing software or AI was used to add, remove, or change physical elements of the property. Examples include:

  • Virtual staging: Adding furniture, rugs, or decor to an empty room.

  • Digital decluttering: Removing existing furniture, personal items, or eyesores like power lines, cracked pavement, or neighboring structures.

  • Virtual renovations: Changing paint colors, upgrading countertops, installing virtual flooring, or altering structural elements.

  • Landscaping: Digitally adding green grass, removing dead trees, or changing exterior views.

  • Rule of thumb: If the edit changes the substance or actual condition of the property, you must disclose it.

Standard Enhancements (Disclosure Not Required)

You are still free to make the property look its best through standard photographic processing. AB 723 explicitly exempts routine image corrections that do not misrepresent the real property. These include:

  • Lighting and exposure corrections.

  • Color or white-balance adjustments.

  • Image sharpening, straightening, and cropping.

  • Minor angle adjustments.

  • Rule of thumb: You can make the property look better, but not different.

How To Comply: The 2-Step Rule

If you are using a digitally altered image in your marketing, you must meet two parallel obligations.

  • Label the image clearly: Include a conspicuous statement directly on or adjacent to the image indicating that 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.

  • Provide the original photo: Buyers must have a way to see the before image.

For online listings, including MLS, websites, and Zillow, the unaltered version of the photo must be posted directly alongside the altered one, usually immediately before or after it in the photo gallery.

For print advertising, including flyers, mailers, and magazines, the piece must include a link, URL, or QR code directing the buyer to a publicly accessible webpage that displays the original, unedited photos.

Major California Multiple Listing Services, including CRMLS and SDMLS, have already updated their rules, such as Rule 11.5.2, to enforce these exact standards.

What This Means for Photographers and Media Agencies

Photographers, virtual stagers, and media agencies must adapt their delivery workflows to support their clients' compliance. If you are a media professional, you should:

  • Deliver dual sets: Always provide the client with both the original, unaltered files and the virtually staged or altered files.

  • Use clear file naming: Distinct names such as Kitchen_Original.jpg and Kitchen_VirtuallyStaged.jpg help agents avoid uploading the wrong file.

  • Build in watermarking: Many media delivery platforms are rolling out features that automatically stamp "Digitally Altered" on virtually staged images.

  • Offer dedicated galleries: For print marketing, provide a dedicated link or QR code to an unedited gallery that agents can easily drop into their flyers.

The Penalties for Non-Compliance

Ignoring AB 723 is not worth the risk. Because this law falls under the California Real Estate Law, willful violations are considered a public offense punishable by fines 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.

Final Thoughts: Transparency as a Strategy

While AB 723 might seem like extra paperwork, the smartest agents are treating it as a competitive advantage. In an era where 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 are not just complying with the law. You are positioning yourself as an honest, professional, and reliable guide in the real estate journey.

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 claims in real estate marketing.

Juan P. Bermudez