State statuteCAEffective January 1, 2026

California AB 723: Real Estate AI Photo Disclosure Law Explained

California AB 723 (Business & Professions Code §10140.8) took effect January 1, 2026. Plain-English guide for realtors: what counts as a "digitally altered image", what disclosure you must provide, what AB 723 does NOT do, and how to stay compliant on the MLS.

Last updated Sources linked belowInformation, not legal advice

Reviewed by SofaBrain Compliance Desk, Compliance reviewCorrected against primary sources October 8, 2026

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Editorial illustration evoking California AB 723: a tablet showing the California state outline overlaid with AI-circuit patterns, beside a wooden gavel and paperwork

Short answer

  • Effective January 1, 2026. Codified at Cal. Bus. & Prof. Code §10140.8.
  • Every AI-altered listing image now requires both (1) a disclosure statement on or adjacent to the image, and (2) a link to the original unaltered photograph.
  • On a website you control, include the unaltered original in the posting, or link to it and say in the disclosure that the original can be seen at the link (§10140.8(a)(2)).
  • Common edits (lighting, white balance, cropping) are excluded — only material alterations trigger the rule.
  • Penalties flow through DRE discipline (§10176 / §10177) plus private rights of action under UCL §17200 and CLRA.
  • AB 723 does NOT ban AI staging, does NOT require an on-image watermark, and does NOT preempt stricter MLS rules.

What AB 723 actually requires

AB 723 amends California real estate law to require disclosure of any digitally altered image used in the advertisement or promotional material for the sale of real property. The duty applies to "a real estate broker or salesperson, or person acting on their behalf" — which includes virtual staging vendors operating on behalf of a listing agent.

The two required elements

  1. A statement disclosing that the image has been altered, "reasonably conspicuous and located on or adjacent to the image."
  2. A link to a publicly accessible internet website, URL, or QR code that includes and clearly identifies the original, unaltered image.
Site-controlled exception

If the ad is posted on a website you control (your brokerage site, IDX pages, your own landing page), include the unaltered original in that posting. The statute also lets you link to a public page that includes and clearly identifies the original, as long as your disclosure statement says the unaltered images can be seen at that website, URL or QR code.

What counts as "digitally altered"

AB 723 defines a digitally altered image as one altered through photo-editing software or AI to add, remove, or change elements — including fixtures, furniture, appliances, landscaping, facades, or neighboring properties visible from the property.

Common-edits safe harbor

These are explicitly NOT digital alterations under AB 723: lighting, sharpening, white balance, color correction, angle, straightening, cropping, exposure, or "other common photo editing adjustments" that do not alter the representation of the property.

What AB 723 does NOT do

Three common misreadings of the statute:

  • It does NOT ban AI virtual staging — it mandates disclosure plus original-image access.
  • It does NOT require an on-image watermark — a textual disclosure on or adjacent to the image is sufficient under the statute itself. (Watermark obligations come from individual MLS rules, especially CRMLS Rule 11.5.2.)
  • It does NOT preempt stricter MLS rules. Realtors must comply with both. Several California MLSs are stricter than the statute on watermark and parallel-image requirements.

Penalties and enforcement

AB 723 does not add a fixed fine. Instead, it folds undisclosed digital alteration into "false, misleading, or deceptive advertising" under existing California Department of Real Estate disciplinary jurisdiction (B&P §10176 / §10177). Sanctions include license suspension, revocation, and civil penalties.

On top of DRE discipline, undisclosed AI staging is independently actionable as a private cause of action under California UCL (Bus. & Prof. §17200) and CLRA (Civ. Code §1750), both of which carry attorneys-fees provisions. As of mid-2026 no published California judgment exists narrowly on AI staging, but the plaintiff-bar template is loaded.

A disclosure phrase written for AB 723 and California MLSs

A disclosure block like this one, placed on or next to every altered image, covers the statement AB 723 requires and the "true picture" duty in NAR Article 12. Check CRMLS Rule 11.5.2 for any labeling it adds:

This image has been digitally altered with generative AI virtual staging. The original, unaltered photograph is available at [URL/QR code]. Furniture and décor are not included in the sale. No structural elements, finishes, fixtures, or landscaping of the actual property have been modified in this image.

Pair it with a link or QR code to a public page that shows and clearly identifies the unaltered original, which §10140.8(a)(1) requires alongside the statement.

What SofaBrain does, and what you still do

SofaBrain can stamp a disclosure label (such as "Virtually staged — digitally altered image") on downloads and can download the original alongside the edited image. Both are settings you choose; the default download is unlabeled, so check the wording and placement against your state and MLS rules before you publish. For a California ad you also need the link or QR code to the original, which you add where the listing is published.

Frequently asked questions

Does AB 723 apply if the listing is in California but I am not?

Yes. AB 723 is property-based, not licensee-based — it applies to any digitally altered image used to advertise California real property, regardless of where the agent or vendor is located.

Does decluttering (removing items via AI) trigger AB 723?

Yes. Removing elements is explicitly enumerated in §10140.8(d) alongside adding and changing them. Decluttering a photo of a cluttered kitchen requires disclosure.

Is a watermark on the image enough?

For AB 723 alone, an on-image watermark is more than enough — AB 723 only requires "on or adjacent to" placement. However, AB 723(a)(2) separately requires a link to the unaltered original, which a watermark alone does not satisfy. You need both.

Can I rely on the MLS's own disclosure tooling?

No. AB 723 places the duty on the licensee, not the MLS. MLS disclosure tooling (where it exists) is supplementary. The disclosure must travel with the image — on it, adjacent to it, and via a parallel original — wherever it is published.

Has anyone been disciplined under AB 723 yet?

As of mid-2026, no published DRE disciplinary action under §10140.8 has been issued (the statute is still under a year old). However, MA, NJ, NY, and OR Attorneys General have flagged undisclosed AI marketing imagery as actionable under their consumer-protection statutes more broadly.

Sources

CA cities

Information, not legal advice. This page summarizes laws, MLS rules, ethics guidance and insurance practices as of October 8, 2026. It does not create an attorney-client relationship, and SofaBrain Inc. is not a law firm. For specific questions, consult an attorney licensed in your state or your E&O carrier.