California Assembly Bill 723 seeks to regulate the growing role of AI in real estate, with an emphasis on disclosure and consumer protection. California Assembly Bill 723 seeks to regulate the growing role of AI in real estate, with an emphasis on disclosure and consumer protection.
Accuracy is key. As the North Bay’s busy real estate season ramps up, a new law is tightening how homes can be portrayed in listings. California Assembly Bill 723, which went into effect in January, requires photographs that are digitally altered through artificial intelligence to include statements indicating the changes. The language of the bill applies to photos in which elements are added or removed to improve a property’s appearance in all promotional materials. Under truth-in-advertising laws, “real estate licensees may not publish, advertise, distribute or circulate any material or information that is false, deceptive or misleading.” “It’s fairly commonplace to replace the sky with a blue sky. It’s also a common experience to edit out the uncle’s car in the way that no one can find the keys to,” said photographer Daniel Wilson, whose Santa Rosa company, Photovino, provides visuals for the North Bay real estate community. “We think these are good guidelines. There’s always an ethics boundary of what we can remove,” he said. There is some leeway, as long as the image remains realistic. A photo shoot doesn’t have to involve actually starting a fire in the fireplace when AI may be used to produce flames. However, the fireplace in the house had better work. Otherwise, the photo would deceive wannabe buyers. Under the guise of what not to do, adding a sunset to an
east-facing window on a photo wouldn’t meet the standards of good business practices — with or without a disclaimer — because it’s impossible to achieve. “AB 723 explicitly contains an exemption for common photo editing adjustments that do not change the representation of the real property,” said California Assemblywoman Gail Pellerin, D-Santa Cruz, who introduced the bill. “Additionally, any photo editing is allowed as long as it is labeled, and the original photos are made available to the consumer. If the listing agent would like to turn the walls, floors, fixtures and furniture bright pink, there is nothing prohibiting them from doing so as long as they disclose.” In this scenario, walls could be repainted, and furniture and fixtures are available in many colors. The regulations exclude images where only lighting, sharpening, angling, color corrections, straightening and cropping are made. The law comes with no fines or penalties. However, the California Department of Real Estate may address violations. Sonoma County Realtors said they’re already on board with the practice, having primarily complied, before the bill was signed by Gov. Gavin Newsom last October was enacted. Compass Healdsburg Realtor Carol Lexa said the Multiple Listing Service (MLS) has already been proactive, creating a seal to notify prospective buyers of changes made. “All brokers want to be compliant and reputable,” Lexa said.
40 NorthBaybiz
March | April 2026
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