California house hunters should have an easier time detecting when homes look far better in real estate photos than they do in real life, thanks to a new state law that took effect Jan. 1.
Under Assembly Bill 723, real estate agents and brokers who display photos of a home that have been digitally altered with editing software or artificial intelligence must include a “reasonably conspicuous” statement “disclosing that the image has been altered.”
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The law states that the disclosure statement applies to “alterations that add, remove, or change elements in the image, such as interior fixtures, furniture, appliances, flooring, walls, paint color, hardscape, landscape, facade, floor plans and exterior features on or visible from the property such as streetlights, utility poles, views through windows, and neighboring properties.”
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Agents also must provide an original, unaltered version of the photo, either on or next to the photo itself or via a QR code or link to a website where viewers can see the original.
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The law applies to techniques that are employed after photos have been shot, meaning it wouldn’t address a common complaint among house hunters: the use of wide-angle camera lenses to make rooms look bigger. It also wouldn’t require disclosure of routine image editing, such as cropping and color correction.
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AB723 is just one of many ways state legislators are trying to regulate the rapidly growing use of AI. California is the first state to require an explicit disclosure of digitally altered real estate photos, although Wisconsin passed a similar law in December that takes effect next year, said Daniel Hershkowitz, senior vice president of risk management with the Agency, a real estate brokerage.
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Hershkowitz wryly noted that the same thing happens in real life. “You walk into a room (that has been physically staged) and realize that’s small-scale furniture. Nobody is going to sit on that couch.”
Realtor associations, Multiple Listings Services and the California Department of Real Estate, which licenses and regulates real estate agents and brokers, have long-standing rules that prohibit false or deceptive advertising, but they were not consistent nor did they require explicit disclosures about altered images.
In the past, if a room was virtually staged, for example, agents generally put a note to that effect in the “agent remarks” viewable only by agents or, less frequently, in remarks available to the public, Hershkowitz said.
Some agents would post a virtually staged photo followed by a photo of the unstaged room, but this wasn’t required by state law or regulation.
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Multiple Listing Services in California are working on ways to make sure that the required disclosures show up online on platforms like Zillow and Redfin.