AB 723 and MLS Rules for AI-Edited Listing Photos (2026 Guide)

Are AI-Edited Listing Photos MLS Compliant? The Short Answer

Yes, if your MLS allows the edit and you disclose it the way your MLS and state law require. In California, where AB 723 has applied since January 1, 2026, that means three checks for every AI-altered listing photo:

1. The edit is allowed. CRMLS accepts AI virtual staging of an empty room, or clearing out furniture that will not be sold with the home using Empty Your Space, once it is disclosed. It refuses changes to real parts of the property, such as wall color, flooring, cabinets or landscaping, even with a label (CRMLS).
2. The photo is labeled with a term such as "digitally altered" or "virtually staged" in the photo description field. CRMLS does not require a watermark.
3. The original sits next to it, immediately before or after the altered photo.

Outside the MLS, on flyers, social posts, emails and property websites, follow the statute's own wording: a reasonably conspicuous statement on or next to the altered image, plus a link, URL or QR code to a public page that shows the original (AB 723). If something goes wrong, California's Department of Real Estate (DRE) is clear that "responsibility under current law rests with the licensee and their responsible broker, not the technology provider" (DRE).

Why 2026 Changed the Rules for AI Listing Photos

Edited listing photos still sit in what Real Estate News calls "a patchwork of regulation," with very few rules written for AI. Meanwhile, as Zillow told Fortune, AI has made altered listing photos "faster to produce, sometimes harder to spot and more widespread" (Fortune).

A Q1 2026 study by Coraly, a real estate team growth platform, measured the gap. Of roughly 40,000 primary listing photos on Zillow, Redfin, Realtor.com and Homes.com, nearly 11% showed evidence of digital alteration. More than 90% of the altered images carried no visible disclosure, and 69% involved sky replacement (Real Estate News).

"The most frequently manufactured asset in U.S. residential marketing is not the building. It is good weather." — Coraly, The Altered Listing: US Edition, via Real Estate News

California had already legislated. AB 723 (Pellerin), Chapter 497 of the Statutes of 2025, was approved on October 10, 2025 and added Section 10140.8 to the Business and Professions Code (AB 723). Licensees have had to comply since January 1, 2026 (DRE). The law bans no edit. It standardizes disclosure, and because it sits in the Real Estate Law, a willful violation is a crime. Since then, the DRE has issued AI guidance, CRMLS's rules now carry a $250 fine, New York City has proposed rules for rental photos, and California has extended disclosure to rental ads from 2027.

This guide covers agents and brokers, the photographers and editors who deliver images for them, property managers and landlords facing the 2027 rental rule, and developers who build photo editing into listing software.

AB 723 at a Glance: What Is Covered and What Is Exempt

The statute covers images "altered through the use of photo editing software or artificial intelligence to add, remove, or change elements in the image": fixtures, furniture, appliances, flooring, walls, paint color, hardscape, landscape, facade, floor plans, and "elements outside of, or visible from, the property," such as streetlights, utility poles, views through windows and neighboring properties. It excludes images 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" (AB 723). Images "created by or at the direction of" the licensee, or someone acting for them, count, so edits made by your photographer or editing service are covered too.

"Covered" means disclose, not banned. The refusals in the last column come from CRMLS's truth-in-advertising rules, not from the statute (CRMLS).

The exemption has a condition. An "enhancement" that also erases a power line no longer counts as a common adjustment, and one that swaps the sky is safer treated the same way. The DRE warns that "failure to review AI-generated images for compliance may result in violations even if the alteration was unintentional." Coraly describes two common ways such edits slip through: photographers deliver retouched JPEGs and delete the originals, or agents upload a phone photo straight from a filter (Real Estate News). Compare even AI photo enhancement or image straightening output with the original before treating it as exempt.

Skies, twilight and window views. Skies and twilight are not named in the statute, but sky replacement appears in 69% of altered images in the Coraly sample, and both CRMLS and SDMLS say to disclose when in doubt. Label sky replacement and day to dusk photo editing, and pair them with the original. Window views are named outright. In Roomagen's Day to Dusk tool (Time Shift Interior in the app), the default window view is "Keep Original"; choosing City Skyline or Ocean / Beach instead is exactly the kind of change the statute lists.

Floor plans count. If a plan redrawn with sketch to floor plan adds, removes or changes anything, it is an altered image, so check every wall, dimension and room name against the source. Roomagen's floor-plan tools themselves warn that the AI redraws the text and the numbers need checking before you publish.

How AB 723 Works: Disclosure, Original Access, and Liability

Duty 1: a statement on or next to the image. Each covered ad needs "a statement disclosing that the image has been altered," and it must be "reasonably conspicuous and located on or adjacent to the image" and say that the unaltered images can be accessed through the link, URL or QR code (AB 723). A note in the listing remarks alone is not on or adjacent to the image.

Duty 2: a path to the original. The same ad needs a link to a publicly accessible website, URL or QR code that "includes, and clearly identifies, the original, unaltered image." On a website the licensee controls, the posting must include the unaltered versions or link to a public page that clearly identifies them. Inside the MLS, CRMLS and SDMLS implement this by placing the original next to the altered photo. Flyers, social posts, emails and print ads need their own link or QR code.

Which ads. Any "advertisement or other promotional material for the sale of real property," from the MLS listing to the brochure, the social post and the postcard. The statute has no exception for listings or photos from before 2026, so review active listings too.

Who is responsible. The duty falls on "a real estate broker or salesperson, or person acting on their behalf." The DRE's March 2026 advisory adds that a broker's supervisory obligation "extends to the tools used," including AI software, and that licensees "must also make the original, unaltered image available to consumers" (DRE). Hiring a photographer, a staging service or an AI platform does not move the duty.

Penalties. Under the Real Estate Law, "any person ... who willfully violates or knowingly participates in the violation" commits a misdemeanor punishable by a fine of up to $10,000, up to six months in county jail, or both (B&P Code §10185). The DRE adds that failing to review AI output can lead to license discipline for substantial misrepresentation or for failing to make required disclosures, and that brokers can be disciplined for failing to supervise. MLS fines come on top.

What MLSs Require in Practice: CRMLS and SDMLS Implementations

California Regional MLS (CRMLS) and San Diego MLS (SDMLS) both began enforcing AB 723 through their own rules on January 1, 2026.

CRMLS (Rule 11.5.2). Its guidance, last updated July 24, 2026, fills in what the statute leaves open (CRMLS):

• The label belongs in the photo description text field: "digitally altered," "virtually staged," "digitally enhanced" or a similar term. A watermark is not required, and an AI tool's automatic watermark does not replace the label.
• Clearing out furniture that will not be included in the sale counts as altered.
• Truth-in-advertising rules bar adding, removing or modifying real parts of the property (wall color, flooring, cabinets, wall dimensions, landscaping) and removing elements such as utility poles or wires. Photos must represent the property and its condition as of the sale date.
• AI-generated landscaping images are not permitted; CRMLS treats them as a visual tool for buyer's agents. Its landscaping guidance makes room only for changes the seller will actually make as part of the listed price.
• A violation brings a warning, then a $250 fine if it is not corrected in a timely manner. When in doubt, disclose.

SDMLS. SDMLS enforces AB 723 "as part of its MLS rules and data distribution standards," covering listings and downstream IDX, VOW, API and syndication displays. Vendors "may not remove, obscure, or modify altered-image indicators, pairings, or related metadata," and participants "remain responsible for compliance even when using third-party vendors, photographers, or service providers" (SDMLS). With Coraly, SDMLS also built an AI scan that flags likely alterations at upload, matches them to the unaltered originals and generates a public proof page showing the originals with a disclosure (Real Estate News).

Each MLS sets its own details, as the two columns show. Outside California, check your board's current photo rules; our MLS photo requirements and disclosure guide compares boards.

The NAR and Zillow Layer

NAR Code of Ethics. Article 12 requires REALTORS to "present a true picture in their advertising, marketing, and other representations" and prohibits "misleading consumers, including use of misleading images." It does not mention AI or disclosure explicitly (Real Estate News), but it binds members in every state, with or without a state disclosure law, and clear disclosure is the practical way to keep an altered photo from becoming a misleading one.

Zillow. In July 2026 a Zillow spokesperson said: "We support clear disclosure when AI is used to materially alter a listing image, and believe consumers should be able to view the original content alongside the altered version wherever possible." Zillow added that its content standards require listing photos to accurately represent a home, and that its virtual staging feature is clearly labeled and paired with the original image so buyers can compare both (Fortune).

California law, the two MLSs above and Zillow have landed on the same formula, and NAR's "true picture" standard points the same way: label the altered image and keep the original one step away.

Who Is Accountable When an AI Photo Misleads? The Texas TREC Answer

One exam-style question puts it this way: a sales agent uses AI to virtually stage a property, and the image is later found to be a misleading advertisement under Texas Real Estate Commission (TREC) rules. Who could be held accountable?

The answer is the sales agent and their sponsoring broker. TREC's broker-responsibility rule, 22 TAC §535.2, makes a broker "responsible for the authorized acts of the broker's sales agents," states that a broker "is responsible to ensure that a sponsored sales agent's advertising complies with" the advertising rule (§535.155), and requires written policies so that each sponsored sales agent "complies with the Commission's advertising rules." A broker may ask another license holder to help administer compliance, but "may not relinquish overall responsibility" for supervising the license holders it sponsors (22 TAC §535.2). Nothing in the rules moves responsibility to the software that produced the image.

California reaches the same result: the DRE says responsibility for misleading AI advertising rests with the licensee and the responsible broker, not the technology provider. In both states, whoever's license is on the ad answers for the images in it.

What Is Coming Next: California Rentals in 2027, New York City and Beyond

California rentals (AB 2025). Approved on September 27, 2026 as Chapter 572, AB 2025 adds Civil Code §1940.11 (AB 2025) and takes effect January 1, 2027 (California Apartment Association):

• It applies to "a person" who advertises a rental with a digitally altered image: landlords, property managers and anyone else, not only real estate licensees.
• It covers images "fully generated through artificial intelligence software" as well as edited photos, with the same covered elements and exemptions as AB 723.
• The disclosure must be reasonably conspicuous and on or adjacent to the image, and the ad must include the unaltered versions or a link, URL or QR code to them. That original-photo duty does not apply to images or renderings that were not originally made with a capture device.
• A licensee who violates it "shall be deemed to have violated that person's licensing law."
• It amends §10140.8 so the sale-ad rule no longer covers leases longer than one year. Until then, "sale" in this context includes a leasehold exceeding one year, so licensee ads for such leases already fall under AB 723.

Property managers can set up labels and original-photo links now; our page on virtual staging for property managers covers the editing side.

New York City. On July 16, 2026, Mayor Zohran Mamdani proposed requiring landlords, brokers and online listing platforms to disclose AI-created or digitally altered rental listing photos and videos, as one of 23 initiatives in the city's Rental Ripoff Report. Fortune describes what would happen "if adopted" and notes the name the problem has picked up: "housefishing" (Fortune).

Elsewhere. Wisconsin has enacted its own rule: from January 1, 2027, under Wisconsin Act 69, real estate licensees must disclose when technology, including AI, has been used to add, remove or change property features in a way that creates a false or misleading impression (Law Commentary). New York's Department of State issued a trend alert in late 2025 warning that AI images in home listings "may produce misleading or exaggerated representation of properties" (Real Estate News), and New York lawmakers are considering Senate Bill 9584, which would require disclosure of materially altered or virtually staged images (Law Commentary). New Jersey lawmakers are considering legislation on deceptive AI-generated and heavily altered listing images (Fortune). In June 2026, Real Estate News described California as "one of the only states" with such a law, and Wisconsin's joins it in 2027. The direction is consistent: more surfaces that require disclosure, more emphasis on a viewable original, and more checking at upload.

Rules by Surface: A Compliance Matrix

AB 723 Photo Compliance Checker: 8 Questions for Every Photo

Automated scans such as the SDMLS upload check help, but they do not move the duty off the licensee. Ask these eight questions before any photo goes into a listing or an ad:

1. Did any edit add, remove or change something in the scene? Furniture, fixtures, appliances, flooring, walls, paint, landscape, hardscape, facade, a floor plan, or anything outside or visible from the property. If only lighting, exposure, sharpening, white balance, color, angle, straightening or cropping changed, and the property looks the same, the photo is exempt. If you are unsure, treat it as altered.
2. Does your MLS allow this edit at all? CRMLS refuses changes to real parts of the property and AI-generated landscaping, even with a label. Keep those images for buyer and seller conversations.
3. Do you have the untouched original? If a vendor sent only edited files, get the originals first.
4. Is the label where your MLS wants it? At CRMLS, that is the photo description field.
5. Does the original sit immediately before or after the altered photo?
6. Does every ad outside the MLS carry the statement and a link, URL or QR code? Flyers, postcards, social posts, emails and websites all count, and the statement must say the originals are available through the link.
7. Did a licensee compare the final image with the original? Look for changes nobody asked for: a new sky, missing wires, a different view through a window, a repaired crack.
8. Is the review documented? The DRE recommends keeping records of how AI outputs were reviewed. Keep the original, the edited file and the published version together.

A "no" to question 1 means you can publish normally, and a "no" to question 2 means the image stays out of the listing. Every other question needs a "yes."

Compliance Checklist for Agents and Brokerages

1. Write an AI photo policy. The DRE recommends written policies, training, human review before publication and records of compliance steps (DRE).
2. Put originals in vendor contracts. Coraly suggests that brokers update contracts with agents and vendors to address AI-altered images and require photographers to provide original, unaltered photos.
3. Standardize files and labels. Store each original next to its edited version under matching names, and use one label wording your MLS accepts.
4. Build one originals page per listing. A public page, or a QR code that leads to it, that clearly identifies each original covers flyers, social posts and emails at once.
5. Review active listings and brief everyone who posts. The statute has no exception for older photos, and the misdemeanor provision reaches anyone who willfully violates or knowingly participates in a violation, including assistants and agencies acting for you.
6. Prepare rental teams for 2027, when AB 2025 brings the same discipline to rental ads.

For photographers and editors: deliver the untouched original with every edited file, never overwrite or delete originals, and note what you changed in each image. Your client carries the legal duty, but your files decide whether they can meet it.

Many creative edits survive all of this: AI virtual staging, Empty Your Space for furniture that will not be sold with the home, and object & item removal for clutter stay usable in CRMLS listings, labeled and paired. Keep virtual renovation and virtual landscaping previews for buyer and seller conversations, since CRMLS refuses those changes in listing photos.

Which Photo Editing Apps Are MLS Compliant?

None, on its own. AB 723 and MLS rules regulate how an altered image is published, not which software produced it, and CRMLS states that AI-altered images count as digitally altered images. What separates tools is how well they support the disclosure work. Ask whether an app lets you control what changes (marking the exact area, options that add nothing), keeps originals and results together, shows a before/after view for review, makes clear which version you exported, and applies the same settings across a batch. If it watermarks its output, remember that a vendor's watermark is branding, not the statement AB 723 asks for, and CRMLS still wants the label in the description field.

For Platforms and Developers

Portals, brokerage back offices, photography platforms and anyone wiring AI editing into a listing pipeline need compliance built into the pipeline itself:

1. Store originals durably at stable URLs, so the link or QR code in every ad keeps working.
2. Carry the altered flag, the label and the pairing through every feed. SDMLS already bars vendors from removing, obscuring or modifying altered-image indicators, pairings or related metadata.
3. Keep a per-image edit record of what was added, removed or changed, for licensee review and broker audit.
4. Place the disclosure per surface: a description-field label for the MLS, a statement on or next to the image plus a link or QR code everywhere else.
5. Gate publishing on human review, as the DRE expects.
6. Make jurisdiction rules configurable: sale ads, rental ads from 2027 and New York City's proposal differ.

Where Roomagen Fits

Roomagen makes the edits; it does not make a listing compliant. It adds no disclosure label by default in the app and none at all through the Roomagen API, nor any edit manifest or MLS-specific output, and its Terms of Service make users responsible for disclosing virtual staging and AI edits in line with their MLS rules, NAR guidelines and applicable laws. You can turn on a small “AI” badge for downloads in Settings (“AI label on downloads”), but it is not the statement AB 723 asks for or the label your MLS wants. What Roomagen offers a disclosure workflow:

• a before/after comparison on the result screen;
• a Library that files each result in the folder of the photo it came from;
• batch runs on paid plans (up to 3, 7 or 20 photos on Starter, Pro and Business) that land in their own folder with a ZIP download;
• numbered Refine versions on four tools;
• controls meant to limit what changes, such as the marking screen for Remove Item and Add Piece, Declutter's "Tidy only — add nothing" option and "Keep Original" as the default window view in Time Shift Interior.

Roomagen's image models are generative, so check every result against its original before you publish, and keep your own archive of originals. Results are kept for 3 days on Free, 30 on Starter, 180 on Pro and without a time limit on Business, and every plan caps how many results it stores, from 5 on Free to 2,000 on Business. Free-plan output normally carries a Roomagen watermark badge, which is branding, not a disclosure statement.

The Bottom Line on AB 723 Compliance

AB 723 did not outlaw AI listing photos. It turned the label-plus-original norm into law: a conspicuous statement on or next to every altered image, a working path to the original in every ad, and a misdemeanor for willful violations, with a fine of up to $10,000, up to six months in county jail, or both. The licensee and the responsible broker answer for it, whoever made the edit, and rental advertisers join on January 1, 2027. Coraly's finding that more than 90% of altered listing images carried no visible disclosure shows how much of the market still has to build the routine.

This article is general information, not legal advice. For your situation, talk to a California real estate attorney, your broker or your MLS compliance team.

To test the edits themselves, Roomagen's Free plan includes 6 one-time credits, enough for three watermarked runs, so you can try AI virtual staging, Empty Your Space or day to dusk photo editing on your own photos. Label and pair whatever you publish.