Do You Have to Disclose AI-Edited Listing Photos? AB 723 and MLS Rules

The short answer

You've just staged the living room and you're about to upload it to the MLS. Do you need a label?

Use this test. If the edit only makes the same photo cleaner, you generally don't. If it changes what the property looks like, you do. That is the line the California Regional MLS (CRMLS) and the Arizona Regional MLS (ARMLS) draw, and California law now backs it up.

AB 723 requires licensed California brokers and salespeople to disclose digitally altered images in real estate advertising, and to point to a public place where the original can be seen ⁴. Several boards add stricter rules of their own. A photo can break an MLS rule without clearly breaking state law.

What AB 723 and CRMLS Rule 11.5.2 say

AB 723 and CRMLS Rule 11.5.2 both took effect on 1 January 2026. CRMLS defines a digitally altered image as one made by or for a broker or salesperson and changed with editing software or AI, for example by adding, removing or changing elements such as furniture or appliances. It names AI tools like REimagineHome as covered ¹.

The responsible person is the broker or salesperson, or someone acting for them. In practice that's the listing agent. The San Francisco Association of REALTORS says the duty currently rests with the Broker of Record, specifically the agent on the listing agreement ³.

What you must do at CRMLS

1. Label the image in the photo description with a term such as "digitally enhanced", "digitally altered" or "virtually staged".
2. Put the unaltered original in the listing immediately before or after the altered image.
3. If a tool adds its own watermark, still say in the description and next to the original that the photo is enhanced. A watermark alone isn't enough ¹.

CRMLS adds a rule of thumb worth remembering: if you can't tell whether an image counts as altered, err on the side of caution and disclose it ¹.

What counts as a normal fix

CRMLS allows common edits as long as they don't change how the property is represented: lighting, sharpening, white balance, color correction, angle, straightening, cropping and exposure ¹. ARMLS says it in fewer words: brightness, contrast, color, cropping or sharpening are not considered altered ².

What counts as altered: a working table

This puts the edits agents ask about next to what CRMLS and ARMLS say. "Not addressed" means we didn't find it in the pages we read. It does not mean it's allowed.

Other boards: ARMLS, New York and the portals

ARMLS has required a Disclosure of Digitally Altered Images since 28 May 2026 for altered photos added in Flexmls. Its examples of altered interiors include adding furniture, an accent wall color, removing items, adding a fire to a fireplace and adding architectural details. Altered exteriors include adding patio furniture, improving pool features, enhancing landscaping and removing objects such as trash cans ².

Elsewhere the picture is patchy. NAR's Code of Ethics Article 12 tells Realtors to present a true picture in their advertising, but it doesn't mention AI or disclosure ⁴. The New York Department of State issued a consumer alert in late 2025 warning that AI images can misrepresent properties and reminding licensees that ads must be accurate. It didn't require a disclosure ⁴.

Label wording varies too. Some boards want it in the photo caption, others in agent remarks or on the first photo. Check yours. If you list in more than one market, one label won't satisfy every board.

Why this is getting enforced

In the first quarter of 2026, Coraly looked at about 40,000 primary listing photos from the four major portals. About 11% showed signs of alteration. Of those, 90% changed the exterior or the surrounding landscape and 69% involved sky replacement. Redfin had the highest rate of virtual staging, at 17.7%. And more than 90% of the altered primary images carried no visible disclosure ⁴.

San Diego MLS worked with Coraly on a tool that scans every image at upload, flags likely AI alterations and matches them to the unaltered originals, with a public proof page for each listing ⁴. Expect other boards to follow. The practical upshot: an edit nobody noticed in 2025 can be flagged automatically in 2026.

A disclosure routine that works

1. Keep every original. Save the untouched files in a folder named for the listing. You'll need them for the adjacent upload.
2. Sort each edit. Normal fix, or alteration? Use the table above and your MLS rules.
3. Label it in the description. Use words your MLS accepts: "virtually staged", "digitally altered" or "digitally enhanced".
4. Upload the original next to the edit if your MLS asks for it (CRMLS does), or give a public link or QR code to the original where the rule allows it ³.
5. Put it in your contracts. Ask photographers and vendors to hand over unaltered originals and to tell you what they changed. Coraly recommends the same ⁴.
6. When in doubt, disclose. A label is free. A $250 fine and a call from compliance cost more ¹.

Label wording you can copy

CRMLS accepts clear terms such as "digitally enhanced", "digitally altered" or "virtually staged" in the photo description ¹. Your MLS may set its own wording, so check first. These work as starting points:

• Virtually staged. The unaltered photo is shown next.
• Digitally altered: furniture removed. The unaltered photo is shown next.
• Digitally altered: sky replaced. The unaltered photo is shown next.
• Digitally enhanced: lighting and color corrected.

Name what you changed. "Digitally altered" tells a buyer very little. "Furniture removed" tells them what to expect.

A short policy for your team

1. Every listing keeps its untouched originals in one folder.
2. Every edit that adds, removes or changes an element gets logged: what, by whom, with which tool.
3. Alterations are labelled in the photo description before the listing goes live.
4. The unaltered original goes up beside the altered image wherever the MLS requires it.
5. Nobody changes walls, floors, cabinets, landscaping or utility lines in MLS photos.
6. When in doubt, the listing agent asks the broker before publishing.

A vendor clause to add

Coraly recommends adding AI-disclosure terms to agent and vendor contracts ⁴. A plain version for photographers and editors: "The vendor delivers the unaltered original files with every edited set and lists each alteration made, such as virtual staging, object removal and sky replacement. The vendor does not alter walls, floors, fixtures, landscaping or utility lines."

What is still unclear

• Sky replacement and day to dusk. Neither the CRMLS nor the ARMLS page we read covers them, and sources disagree. Disclose.
• Removing unattached items. One San Francisco guide treats it as exempt ³, while CRMLS treats virtual clearing as altered ¹.
• The statute text. We cite MLS guidance and press coverage, because we couldn't retrieve the statute itself.
• Other states and portals. New York has issued a consumer alert only, and the sources we read don't describe the portals' own rules ⁴.

Rules are moving fast. A tool, a vendor or a guide like this one can be out of date within a quarter. Check your MLS rulebook each time you hire a new editor.

How this affects the tools you use

Every AI editor runs into these rules, ours included. Against the table above, PROMOREALTOR's tools fall like this.

• Normally fine as fixes: Enhance and Sharpen, Fix Perspective, Lens and Distortion Fix, Relight Interior. Check that the edit doesn't change how the property is represented.
• Alterations to label: Virtual Staging, Interior Style Transformation, Empty This Room, Declutter This Room, Declutter Exterior, Add Blue Sky, Change Time.
• Not for MLS listing photos in California: Garden Fix, Restoration of Ruins and Renovation change what the property is. Use them for concept visuals or marketing material, and say so.

PROMOREALTOR has a "Mark as edited with AI" option that puts an "Edited with AI" mark on the image. It helps, but at CRMLS a watermark alone isn't enough: you still need the description label and the original beside the edit ¹. An edit is saved as a new file and your original is never replaced, so keep it for the adjacent upload.

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