In an era of accelerating digital alteration, where artificial intelligence tools and photo editing software can dramatically change a home’s appearance, the risk of misleading advertising has grown sharply. Misleading advertising has always been illegal nationwide, but new AI tools that are growing in adoption by real estate agents have amplified the problem and caused states like California to respond. 

For brokerages committed to digital sovereignty, meaning they own their listing platforms, control their data, and protect consumers from misleading representations, recent changes in California’s regulatory landscape should be viewed as both a challenge and an opportunity.

Legally speaking, AB 723 makes no demands on an MLS or any other online platform. The responsibility falls on the listing agent and the broker. I imagine the thing that any MLS will have to tackle is to make sure their platform and policies don’t interfere with a licensee complying with the law. Said differently, if you deepfake a photo and put it in the MLS and you do not place a description that the photo was altered and add the original photo, you may be acting unethically, breaking MLS policy, and possibly breaking the law. 

I must admit, when I first reviewed the language of this law I overreacted. The law seemed so overreaching for something that listing agents have done for years – prepared a home for sale with staging. Many thanks to industry leaders across California from lobbyists, lawyers, and MLS executives who provided information from the California Department of Justice conversations to introduce context.

This is a big change for listing agents and brokers only. The following is what we have researched thus far.

What Has Changed

With the enactment of Assembly Bill 723 (AB 723), now codified as Business & Professions Code §10140.8, California has created new requirements for listing brokers and licensees who use “digitally altered images” in real estate listings. Despite the opposition of the California Association of Realtors and efforts of lobbyists, the law takes effect January 1, 2026. The violation is a misdemeanor crime.

Under this law:

  • Any real estate advertising by a California licensed listing broker or salesperson that uses a “digitally altered image” must carry a clear and conspicuous disclosure stating that the image has been digitally altered. This requirement is limited to the listing broker and agent. 
  • The listing advertiser must also provide access to the unaltered original image or images, either by including them in the posting (if the site is controlled by the licensee) or by providing a publicly accessible link, URL, or QR code that clearly identifies the original image.
  • “Digitally altered” is defined as changing, adding, or removing elements of the property, such as fixtures, furniture, appliances, flooring, walls, paint color, hardscape, landscape, facade, floor plans, and elements outside of, or visible from, the property, including, but not limited to, streetlights, utility poles, views through windows, and neighboring properties. Routine edits such as lighting correction, straightening, cropping, or white balance are excluded.
  • The law builds on existing provisions that prohibit false or misleading real estate advertising and gives the California Department of Real Estate (DRE) disciplinary authority to enforce compliance.

Actual legal language:

SECTION 1. Section 10140.8 is added to the Business and Professions Code, to read:

10140.8. (a) (1) A real estate broker or salesperson, or person acting on their behalf, who includes a digitally altered image in an advertisement or other promotional material for the sale of real property shall include in the advertisement or promotional material a statement disclosing that the image has been altered and a link to a publicly accessible internet website, URL, or QR code that includes, and clearly identifies, the original, unaltered image. The statement shall be reasonably conspicuous and located on or adjacent to the image and shall include language indicating that the unaltered images can be accessed on the linked internet website, URL, or QR code.

(2) If an advertisement or promotional material described in paragraph (1) is posted on an internet website over which the real estate broker or salesperson, or person acting on their behalf, has control, they shall include the unaltered version of the images from which the digitally altered images were created in the posting. A person subject to this paragraph may comply with this requirement by including a link to a publicly accessible internet website that includes, and clearly identifies, the original, unaltered image. If the real estate broker or salesperson, or person acting on their behalf, complies with this requirement by including a link to the unaltered images, the statement required by paragraph (1) shall include language indicating the unaltered images can be accessed on the linked internet website, URL, or QR code.

(b) (1) For purposes of this section, “digitally altered image” means an image, created by or at the direction of the real estate broker or salesperson, or person acting on their behalf, that has been altered through the use of photo editing software or artificial intelligence to add, remove, or change elements in the image, including, but not limited to, fixtures, furniture, appliances, flooring, walls, paint color, hardscape, landscape, facade, floor plans, and elements outside of, or visible from, the property, including, but not limited to, streetlights, utility poles, views through windows, and neighboring properties.

(2) “Digitally altered image” does not include an image where only lighting, sharpening, white balance, color correction, angle, straightening, cropping, exposure, or other common photo editing adjustments are made that do not change the representation of the real property.

Sources: Business & Professions Code §10140.8 (AB 723, Chapter 497, Statutes of 2025); Senate Judiciary Analysis, July 15, 2025; Governor’s Press Release, October 10, 2025.

Why This Matters for Listing Brokerages

  • The law only applies to digital advertising of the listing agent and firm because they are the only ones in control of their digital advertising. It does not apply to IDX or other brokers who get data from the MLS because that is not under their control. 
  • Enforcing these disclosure standards protects brand integrity and consumer trust.
  • Listing Agents are altering photos and using them in marketing today and not disclosing it
  • Because the law takes effect in January 2026, now is the time to build processes, tools, policies, and governance around listing imagery to avoid risk.
  • Existing listings that were loaded into the MLS before Jan 1st may need to be updated or removed.
  • The requirement for a QR code or a link only applies when the listing agent or firm are printing advertising.
  • Listing Brokers and listing agents need to be careful to clearly identify altered images on their websites if powered by IDX. If you place the language “altered image” as a watermark on the image when you add it to the MLS and include the original image, you should be compliant. But if you manually add the image to your website – be careful and do it right. 

The Bottom Line

For listing agents and brokerages in California, AB 723 represents a landmark step in photo-media transparency. By acting now, you can strengthen consumer trust, reinforce your commitment to digital sovereignty, and turn compliance into a competitive advantage. 

This is a landmark opportunity for MLSs and Realtor Associations to get in front of this problem before it emerges on January 1st by providing brokers and listing agents with a clear interpretation and training around this new law.

What listing brokers need to do now

  • Explain this new law to listing agents
    • If you load an altered image into the MLS, you must include the words altered image in the photo remarks. You do not need to add the words to the photo, but you may want to do that as an option. It will remind you that if you print the photo, you will include a QR code or link to the unaltered image.
    • If you load an altered image into the MLS, you must also include the original image in the carousel – for example, add the original image at the end.
    • If you print the altered image, you must put a QR code or URL to the original image
    • If you display the image on the internet (like your website or your facebook page), you must include the original image and note the image that was altered.
  • Update your Independent Contractor Agreements
    • You should already have language in your ICA agreements about photos. Add a provision that if the listing agent violates this law, they are responsible.
  • If you are CRMLS participating broker – train agents on the existing MLS rules
    • False or Misleading Advertising and Representations; True Picture Standard of Conduct. Participants and Subscribers may not engage in false or misleading advertising, including, but not limited to, advertisements or representations regarding the Participant’s or Subscriber’s relationship to the MLS, about the MLS itself, or about any property listed with the MLS. MLS Participants and Subscribers shall present a true picture in their advertising and representations to the public, including internet content, images and the URLs and domain names they use, and Participants and Subscribers may not:
    • 12.10.2 Manipulate (e.g., presenting content developed by others) listing content and other content in any way that produces a deceptive or misleading result;
    • 12.10.3 Deceptively use metatags, keywords or other devices/methods to direct, drive or divert Internet traffic;
    • 12.10.4 Present content developed by others without either attribution or without permission,or;
    • 12.10.5 Otherwise mislead consumers, including use of misleading images.

If you have questions about this topic, please connect with a member of our team below.

We’re closely monitoring developments and can help interpret what they may mean for your organization. At this time, there has been limited guidance shared with listing brokers and agents as attorneys, lobbyists, and industry leaders continue their discussions with the DOJ to clarify the implications of the law. Notably, there is ongoing advocacy for a full MLS exemption; a position supported by sound reasoning that we will examine further in an upcoming brief.

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