California AB 723: The New Disclosure Law for AI-Altered Listing Photos

What AB 723 Requires

California's Assembly Bill 723 took effect January 1, 2026, and directly targets a practice AI image tools made easy: quietly altering listing photos in ways that misrepresent a property. It requires real estate brokers, salespersons, and anyone acting on their behalf who submits a digitally created or altered image to also submit the original, unaltered version, and to mark the altered image in a "reasonably conspicuous manner" — using a term like "altered," "digitally altered," or "AI altered."

Critically, the disclosure has to appear on or directly adjacent to the altered image itself — not buried in a disclaimer elsewhere on the listing or MLS page.

What Counts as an "Alteration" Under the Law

AB 723 draws a real line between routine photo editing and changes that misrepresent the property:

Generally not covered (standard photographic adjustments):

• White balance and exposure correction
• Basic color correction and cropping

Covered — requires disclosure:

• Adding grass, landscaping, or other elements that don't exist
• Removing visible utility wires, poles, or other real fixtures
• Virtual staging (adding furniture, decor, or altering room contents that aren't physically present)
• Any AI-generated or AI-modified image that changes how a viewer would perceive the property's actual condition or contents

When It Applies

AB 723 applies to listings posted on or after January 1, 2026. A listing already posted before that date isn't retroactively subject to the requirement — but if that listing is re-activated or re-listed after January 1, 2026, full compliance kicks in at that point. Don't assume an older, still-live listing is grandfathered indefinitely once it gets refreshed.

What This Means for California Agents Using AI Tools

1. Keep the original, unedited photo on file for every altered image — you need to be able to produce it, not just remember you have it somewhere.
2. Label conspicuously, not in fine print — the disclosure has to sit on or next to the image itself. A generic "some photos may be altered" note in the listing description isn't what the law asks for.
3. Know which edits trigger disclosure — routine exposure/white-balance correction is fine; anything that adds, removes, or materially changes what's actually in the frame (virtual staging included) needs the label.
4. Check your MLS's own implementation rules — several California MLSs (including SDMLS) have published their own AB 723 compliance guidance for how altered images get flagged and stored in their systems; confirm your local MLS's specific submission process rather than assuming a single statewide workflow.
5. This is a California state law, not a national one — if you're licensed elsewhere, check whether your own state has proposed or passed similar AI-photo disclosure requirements before assuming they don't apply to you. (British Columbia's BCFSA has separate, already-enforced AI-advertising rules for Canadian agents — see our BC AI advertising guide if you're licensed there.)

Sources:

• AB 723 Made Simple: New Rules for Real Estate Photos — SDMLS
• AB 723: Digitally Altered Images – SDMLS Requirements — SDMLS
• California's New Altered Image Law (AB 723): What Real Estate Pros Need to Know Starting January 1st, 2026 — Pasadena-Foothills REALTORS®

This article is for general informational purposes and is not legal advice. Confirm current requirements directly with the California Department of Real Estate, your MLS, or your brokerage's compliance officer before using AI-altered images in client-facing marketing.