Picture Perfect? Not Anymore: California’s New Rules on Listing Photos

Let’s discuss a new law that applies to both rental housing providers and Realtors, and that is Assembly Bill 723, a law aimed at regulating how digitally altered images are used in real estate listings and advertising, so that prospective buyers and tenants are not misled by enhanced or manipulated visuals.

As we all get savvier in using artificial intelligence (AI) to improve our real estate businesses, we have to be mindful that technology cannot be used to deceive.

Who the law applies to

While often discussed in the context of home sales, the new law applies broadly to real estate advertising, including:

• Homes for sale

• Residential rental listings

• Multifamily property advertisements

• Online postings by property managers

• Marketing created by third-party vendors

If you advertise a rental unit and use digitally altered photos, Assembly Bill 723 applies. We want our followers to remember that even if a photographer, property manager, or marketing company alters images, landlords, real estate brokers, Realtors and their agents remain responsible for compliance if the listing is published on their behalf.

What Counts as a “Digitally Altered Image”

An image is considered digitally altered if it was:

• Created or edited by, or under the direction of, an owner, a real estate professional, or their representative; and

• Modified with photo editing software or artificial intelligence to add, remove, or change visual elements, including fixtures, furniture, appliances, paint colors, landscaping, flooring, facades, or exterior views such as neighboring homes or cityscapes.

These changes may enhance visual appeal but risk misrepresenting the property's true condition or layout. Some examples:

• Let’s say you want to spruce up a rental a little bit – or a lot of bit – by giving it a new paint job electronically, and that’s the picture posted in advertisements.

• If the gardener didn’t show up, no problem, because AI can create the illusion of a perfectly landscaped lawn.

• When a tenant has a window view of telephone poles and wiring, AI can eliminate the eyesore and insert a beautiful cloudless sky.

• No furniture? No problem. The marvels of technology can create a beautiful portrait of a furnished apartment with a wide variety of carpeting to choose from, to boot.

We hasten to say that images can still be manipulated; the law doesn’t ban photo editing but prohibits misleading manipulation. There is a difference between adjusting brightness or contrast and AI-enhanced renovations like countertops.

• A clear and conspicuous statement informing viewers that the image has been digitally altered.

• A link, URL, or QR code leading to a publicly accessible website that displays the original, unedited version of the image, clearly identified as such.

• The statement must also note that the original photo can be viewed using the provided link or code.

Consequences for noncompliance

Stunning but misleading visuals can expose agents and sellers to liability under California’s consumer protection and advertising laws, as well as disciplinary action from the Department of Real Estate (DRE). In other words, the short-term savings from bypassing a photographer could lead to long-term legal and reputational costs.

For landlords and property managers, listing photos are not just marketing tools – they can become evidence in disputes over habitability, misrepresentation, or repairs. A photo that looks better than the unit’s real condition can expose a landlord to claims of misleading advertising, habitability disputes at move-in, and demands for rent reductions or repairs.

The bigger picture and parting thoughts

Assembly Bill 723 aligns with California’s overarching focus on truth in advertising and tenant protections, alongside laws addressing habitability, security deposit accounting, surveillance disclosures, and lease transparency. Together, these laws signal the clear message that how a unit is advertised matters just as much as what’s in the lease.

The new law is also part of the broader effort of lawmakers to rein in the use of technology. As we noted earlier, there has been a spirited debate over the use of algorithms to recommend rent amounts and when to keep units vacant. This ongoing discussion culminated in the passage of  AB 325 (2025), which amends the Cartwright Act to ban "common pricing algorithms" used to restrain trade and create illegal price-fixing, taking effect in 2026.

While AI is rapidly transforming real estate like every other industry and empowering professionals with new tools, expect further actions to regulate its use.

For Realtors and housing providers alike, compliance is more than a legal box to check. Accurate photos help sex expectations, reduce disputes, and protect against claims that can be far more expensive than honest, transparent marketing.