California AB 723 Explained

In short: Since January 1, 2026, California's AB 723 requires two things for any digitally altered listing photo: a conspicuous label stating the image was altered, and a link to the original, unaltered version. It applies to agents, brokers, and anyone acting on their behalf, and a violation can bring a misdemeanor plus a Department of Real Estate citation of up to $2,500.

Since January 1, 2026, putting a virtually staged photo on a California listing without a disclosure label is not just an ethics problem. It can be a crime. California's AB 723 turned a long-standing best practice into statute, and it is one of the strictest digitally-altered-image laws in the country.

The rule itself is short and specific, which is good news: once you know its two requirements, complying is mechanical. This guide breaks down exactly what AB 723 says, what counts as a "digitally altered image," who has to follow it, and what happens if you do not. For the rules in other states, see our 2026 AI photo disclosure map, and for AI video, our guide to virtual staging and AI video disclosure rules.

This is general information, not legal advice. Confirm the specifics with your MLS and your broker or attorney before relying on it.

What is California AB 723?

AB 723 is California's altered-image disclosure law, in effect since January 1, 2026, and it governs digitally altered images in real estate advertising. It adds an AB 723 disclosure duty to the state's Real Estate Law: if a listing image has been altered, the advertisement has to say so and point buyers to the original.

It is among the first states to make an undisclosed listing-photo alteration a state-law matter, with real criminal and administrative exposure, rather than only an ethics or MLS issue. Other states are following, but California set an early template, so building your workflow around AB 723 keeps you covered almost everywhere else.

What does AB 723 require?

Two things, and both have to be present. Here is the operative language:

"A real estate broker or salesperson, or person acting on their behalf, who includes a digitally altered image in an advertisement or promotional material for the sale of real property shall include ... a statement disclosing that the image has been altered and a link to a publicly accessible internet website, URL, or QR code that includes, and clearly identifies, the original, unaltered image. The statement shall be reasonably conspicuous and located on or adjacent to the image."

Source: California Legislature, AB-723

The practical translation: a buried note in the agent remarks is not enough. The disclosure has to sit on or next to the image, and the unaltered original has to be one click away.

What counts as a "digitally altered image"?

This is where most of the confusion lives, and the statute is unusually clear. A digitally altered image is a still photo changed with photo-editing software or AI to "add, remove, or change elements of the real property in the image, including, but not limited to, furniture, appliances, flooring, and walls" (California Senate Judiciary Committee analysis of AB 723, 2025).

So the line is whether the edit changes how the property itself looks:

• Must disclose: virtual staging, removing clutter or damage, changing wall colors or flooring, swapping skies, day-to-dusk conversion, adding or greening landscaping.
• Does not trigger it: routine adjustments that do not change the property, like cropping, straightening, white balance, exposure, and lens-distortion correction.

Add furniture to an empty room, and you disclose. Brighten an underexposed photo, and you do not. The test is the property, not the pixels.

Who has to comply with AB 723?

AB 723 applies to "a real estate broker or salesperson, or person acting on their behalf." That last phrase matters. It reaches the listing photographer, the marketing assistant, and the software that produces the staged image. In practice, though, the licensee is the responsible party. You cannot outsource the duty by pointing at a vendor, so the safe assumption is that any altered image you publish is yours to disclose.

What are the penalties under AB 723?

AB 723 does not write its own fine into the statute, but it does not need to, because it plugs into California's existing Real Estate Law. That creates two separate exposures.

First, the criminal track. Because a violation of the Real Estate Law is a misdemeanor, an undisclosed alteration can carry a fine of up to $1,000 or up to a year in county jail (California Senate Judiciary Committee analysis of AB 723, 2025).

Second, and more likely in practice, the administrative track. The California Department of Real Estate can issue a citation with an administrative fine of up to $2,500 per violation, and it can separately suspend or revoke a license for misrepresentation. Where violations are extensive, the DRE notes that fines "could exceed $50,000" (California DRE, Citations and Administrative Fines, 2025).

AB 723 and your MLS rules are not the same thing

A common mistake is treating AB 723 as the whole picture. It is the state-law floor, but your MLS sets its own rules on top of it, and they can be stricter or more specific. California Regional MLS (CRMLS) and San Diego MLS (SDMLS), for example, both have their own digitally-altered-image policies aligned with AB 723, and an MLS can suspend your data access or require corrections for a violation even where the criminal threshold is not met.

The practical move is to satisfy both at once: label the image, keep the original accessible, and check your specific board. We maintain a plain-English directory of AI disclosure laws and MLS policies, including pages for California AB 723, CRMLS, and SDMLS, that you can check for your market.

How to comply with AB 723 without slowing down

The whole law reduces to a short checklist:

1. Label the image. Put a conspicuous "altered" or "virtually staged" statement on or directly adjacent to the photo.
2. Keep the original reachable. Provide the unaltered image alongside it, or a link or QR code to it.
3. Back it up in remarks. Use listing remarks as a secondary note, never as the only disclosure.
4. Check your MLS. Confirm your board's specific wording and placement rules.

In the listings we process at Reel Estate, the disclosure that slips is almost always the one done by hand on a busy day, which is exactly the failure AB 723 punishes. Reel Estate builds the workflow in: when you export staged photos, it applies a per-edit label and bundles a disclosure package, a ZIP that pairs each altered image with its original and a plain-text disclosure statement, which maps directly onto AB 723's two requirements. See how Reel Estate builds AI disclosure into export for the full workflow.

The bottom line

AB 723 is narrow, specific, and easy to satisfy once it is a default rather than an afterthought. Label the altered image, keep the original one click away, and let your tools do it automatically so it never gets forgotten. California made this the law first; treating it as your baseline keeps you compliant as the rest of the country catches up.

Ready to make disclosure automatic? Try Reel Estate's compliant export and stage your first listing on the free tier.

Sources retrieved June 14, 2026. This article is general information, not legal advice; confirm current rules with your MLS and counsel.