What AB 723 actually requires

The law is narrow and specific. If a listing photo has been digitally altered — by editing software or AI — in a way that changes how the property or its surroundings actually look, two obligations kick in: the listing must carry a clear, reasonably conspicuous disclosure that the image is altered, and viewers must be able to access the original, unaltered photo. When AI did the altering, that access means a link, URL, or QR code to the original image.

It took effect January 1, 2026 as Business & Professions Code §10140.8. (Coverage: San Francisco Chronicle, HousingWire, and a useful legal breakdown from Barnes Walker.)

What counts as altered — and what doesn't

  • Requires disclosure: virtual staging (furniture that isn't there), removing or adding objects, altering lawns or skies to look better than reality, AI renovations of dated rooms — anything that changes what the place actually looks like.
  • Exempt routine edits: lighting and exposure adjustments, white balance, color correction, sharpening, cropping, and straightening — normal photography workflow is fine undisclosed.
  • Still legal: virtual staging itself. California didn't ban the tool; it banned the pretense. Disclose it, provide the original, and stage away.

The 90% problem

Here's the striking part: research cited in HousingWire's coverage found roughly one in nine listing photos on major portals showed digital alterations — and more than 90% of those carried no disclosure. In California, that gap is now a legal exposure. Everywhere else, it's a trust time bomb: buyers who tour a home that doesn't match its photos remember the agent who showed it to them.

Expect the pattern from our Connecticut SB 340 coverage to repeat here too — first-state laws in real estate marketing rarely stay single-state, and commentators are already asking whether Florida follows.

The marketing takeaway: disclosure is a differentiator now

The agents who treat AB 723 as annoying paperwork are missing the play. In a market where 90% of altered photos hide it, "virtually staged — original photo here" reads as integrity, and integrity is precisely what sellers are vetting when they Google you. Clean disclosure practices belong in the same trust stack as your reviews and your published answers — evidence that what you say matches what's real.

Practical workflow, whatever your state: label every virtually staged image in the MLS and on socials, keep originals organized and linkable, brief your photographer and your social workflow on which edits cross the line, and when in doubt, disclose. (California agents: confirm specifics with your broker or counsel — this is reporting, not legal advice.)