How to read this guide
We checked every source on October 17, 2026. Each rule says how we read it:
- Read from the source. We read the document's own text.
- Read in part. We opened the page, but saw only short exact fragments.
- Reported by others. A news item, a trade column or a search extract. We call these "recommended" or "reported", never "required".
In our research we found no federal rule written for AI listing photos. The general rule against deceptive advertising applies to any ad, including one with an edited photo. We did not recheck that point against a federal source this month, so treat it as background, not as a quoted rule.
The rest depends on where the listing is. Start with state law, then your MLS, then your professional code.
Layer one: California AB 723
California passed AB 723 in 2025. It was chaptered on October 10, 2025 (Chapter 497, Statutes of 2025) and took effect on January 1, 2026. It adds section 10140.8 to the Business and Professions Code.
- Bill record: AB 723 on CalMatters Digital Democracy. Chaptering date read in part.
- Effective date: the CRMLS FAQ says the bill "went into effect 1/1/2026". Read from the source.
A note on our own sourcing. We could not open the statute on the legislature's site. The wording below comes from the codified text on a commercial mirror ("current as of January 1, 2026") and a transcription of the chaptered bill, so it is reported by others. Read the current text on the legislature's site before you rely on any phrase.
Who it covers. A real estate broker or salesperson, or a person acting on their behalf, who includes a digitally altered image in an advertisement or other promotional material for the sale of real property. The definition reaches an image "created by or at the direction of the real estate broker or salesperson, or person acting on their behalf". An image that an AI tool made for you, at your direction, reads as yours.
What counts as altered. An image "altered through the use of photo editing software or artificial intelligence to add, remove, or change elements in the image, including, but not limited to, fixtures, furniture, appliances, flooring, walls, paint color, hardscape, landscape, facade, floor plans, and elements outside of, or visible from, the property, including, but not limited to, streetlights, utility poles, views through windows, and neighboring properties."
What is exempt. An image where "only lighting, sharpening, white balance, color correction, angle, straightening, cropping, exposure, or other common photo editing adjustments are made that do not change the representation of the real property."
What you must do. Section 10140.8(a)(1) asks for "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 must be "reasonably conspicuous and located on or adjacent to the image" and must say the unaltered images can be reached at that link.
If the ad is on a website you control. Section 10140.8(a)(2) covers advertising posted on a website that the broker, salesperson or person acting for them controls. There, you include the unaltered version of the images "in the posting". A link to a public site that clearly identifies the originals also works, and the statement then says the originals can be accessed there.
What it does not say. The statute fixes no phrase. It asks for a statement that the image has been altered, not for the words "digitally altered". The word "video" does not appear in the section. We found no fine named in section 10140.8 itself. We did not research what enforcement follows, so ask your broker or the California Department of Real Estate.
Layer two: your MLS
MLS rules are contracts between you and your MLS. They are not state law, so we call them "MLS rules" and never "the law". They differ in wording, placement and whether the original must appear.
CRMLS (California). Rule 11.5.2, effective January 1, 2026. Source: CRMLS Digitally Altered Images FAQ, updated February 13, 2026. Read from the source. A subscriber who submits a digitally altered image must:
- submit the original, unaltered version;
- ensure the original is displayed in the listing "immediately before or after" the altered image;
- label the altered image "Photo Modified", "Virtually Staged", "Digitally Altered," or "AI Altered," or "some accurate substantially similar term" in the text field for the altered photo in the add/edit module.
The FAQ answers the watermark question this way: a photographer does not need to add a "digitally altered" watermark, and the image description is where the term goes.
CRMLS also limits what may be altered at all. It bars photos edited to "add, remove, or modify" real property elements including flooring, walls, windows, structural elements, cabinetry, paint color, hardscape, landscape, facade, fixtures or floor plans, unless the property will be improved to match at closing. It bars the same for "elements outside of, or visible from, the property", including "views through windows". And it states that "AI-generated landscaping images are not permitted in the MLS, as they may misrepresent the real property."
On fines, CRMLS's sources differ by date. The FAQ (February 13, 2026) said there was no fine yet. CRMLS's knowledge base page, updated July 24, 2026, describes a warning first and then a USD 250 fine if the problem is not corrected in a timely manner. We read that page in part.
Canopy MLS (North Carolina). Source: Canopy's article on digital images, virtual staging and virtual tours, last updated February 27, 2026. Read from the source.
- "A listing must not use altered photos, renderings, or virtual tours without disclosure."
- Disclosure must be "directly ON the image or within the virtual tour." Disclosure "ONLY in captions, agent remarks, or supplemental text is NOT acceptable."
- "A nonstaged (original) image MUST be included immediately before or after the AI enhanced or virtually-staged photo(s) or be easily accessible alongside the virtual tour."
Canopy fixes where the disclosure sits. For listings that are proposed or under construction it names a label; for other listings we did not find fixed wording.
Others, with less certainty.
- San Diego MLS says, in its AB 723 FAQ dated December 30, 2025, that "Labeling alone is not sufficient." It also treats images made or modified with AI, including AI virtual staging, as digitally altered. Read from the source.
- SmartMLS (Connecticut) says a photo caption field is not enough and points to a stamp on the photo itself. See its virtually altered photos article and virtually staged photos article. Both pages blocked us, so this is reported by others.
- NWMLS (Washington) is reported to require that "any photo or video that has been altered to show a different appearance of the property must be clearly labeled as 'virtually staged.'" We saw this only in a trade newsletter. Reported by others.
- Wisconsin's Act 69 is reported to take effect on January 1, 2027, covering advertising altered with technology, including AI, when changes create a false or misleading impression. See The Close. Reported by others.
If your MLS is not on this list, find its rule on digitally altered images, virtual staging or AI. Most MLS compliance pages have one.
Layer three: the REALTOR® Code
The NAR Code of Ethics binds REALTORS®, who are NAR members. It does not bind every agent. Source: Code of Ethics and Standards of Practice, effective January 1, 2026. Read from the source.
- Article 12: "REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations."
- Standard of Practice 12-10 prohibits "manipulating (e.g., presenting content developed by others) listing and other content in any way that produces a deceptive or misleading result" and "otherwise misleading consumers, including use of misleading images."
A search of the 2026 Code for "artificial" and "virtual" returns nothing. The Code has no AI-specific rule and no rule number for virtual staging. The hook is the "true picture" duty and the ban on misleading images. If you are a REALTOR®, the Code requires you to present a true picture. It does not tell you which label to use.
Does it cover video?
Be careful here, because the sources are written about images.
- California's section 10140.8 and the NAR Code do not mention video. The CRMLS texts we read say "image or photo".
- At least one MLS, Canopy in North Carolina, names virtual tours outright and wants the disclosure inside the tour, with the originals easily accessible alongside it.
- NWMLS is reported to say "photo or video".
We do not say that AB 723 applies to video, and we do not say it does not. A tour built from altered photos should carry the label on screen and keep the originals one click away. A tour with AI-generated camera moves is not footage of the home, so our view is that the label belongs on the video itself and not only in a caption.
Which edits need a label
Use this as a starting map, then check your MLS. The first column is the edit, the other two are what the rule texts say.
| Edit | AB 723 (reported text) | CRMLS (read from the source) |
|---|---|---|
| Lighting, white balance, color correction, straightening, cropping | Exempt if the edit does not change the representation of the property | Exempt if only slightly enhanced and no change to the representation |
| Adding or removing furniture, decor, appliances | Altered, so a statement and link to the original | Digitally altered: label, original beside it |
| Changing flooring, walls, paint, fixtures | Altered | Barred, unless the property will be improved to match at closing |
| Changing landscape or hardscape | Altered | Barred. AI landscaping images are not permitted |
| Changing what is visible from the property: sky edits, views, poles, neighbors | Listed as an alteration: "elements outside of, or visible from, the property" | Barred for "elements outside of, or visible from, the property" |
Sky, dusk and lawn edits are the ones to treat with the most care. CRMLS bars changes to landscape and to "elements outside of, or visible from, the property" in MLS photos, and a sky or a dusk look is outside the property and visible from it. A greener lawn is a change to landscape. Keep those edits out of MLS photos in California, and use them on social posts and your own site, labeled.
Some edits no label can fix. Hiding damage is one. Canopy states that using staging "to hide material defects is strictly prohibited". Changing walls, windows or square footage is another. Whatever a rule allows, a photo has to show the home as it is.
What the label says and where it goes
The sources disagree on both questions, so check your own rulebook.
| Source | Wording | Placement |
|---|---|---|
| AB 723 | A statement that the image has been altered. No fixed phrase | "On or adjacent to the image", with a link or QR code to the original |
| CRMLS | Its list or "some accurate substantially similar term" | In the photo's text field, with the original right before or after |
| Canopy | No fixed wording for general listings | On the image or inside the tour. Captions alone are not accepted |
| SmartMLS | Reported: a stamp | Reported: on the photo, not in the caption |
Two practical points:
- Use your MLS's own words when it has a list. A generic word such as "enhanced" can read as a minor adjustment, and CRMLS uses "slightly enhanced lighting" for edits that need no label.
- Keep the original next to the altered photo whenever the MLS asks for it. Only you can place it in the listing.
A line for the MLS description field can be short. For example: "Photos 4 and 7 are virtually staged. Originals follow each staged photo." Adapt it to your MLS's wording. For a tour, one trade column suggests a sentence like "AI-generated video created from property photographs. No drone or walkthrough footage was captured." That is the HousingWire column's suggestion, dated June 30, 2026, and it is a recommended idea, not a rule.
What Scenella does and what stays with you
What Scenella does, stated as facts:
- Every asset it makes carries a label. "AI-enhanced" goes on AI-altered scenes, stills and slides. A virtually staged photo or scene carries "Virtually staged" instead. Never both on one asset.
- Originals stay archived and downloadable, and the Photos tab shows the before and after.
- Structure is never altered. Walls, windows and square footage stay as photographed, defects stay visible and the view from a window is not changed. Scenella does offer sky, dusk and greener-lawn edits; see the section above before you use them in MLS photos.
- The AI disclosure page lists which enhancements Scenella may use.
What stays with you:
- The Scenella label is Scenella's label. It is not your MLS's wording, and we make no claim that it fits any MLS, state or portal rule.
- Put your MLS's required wording in the photo description field, and place the original next to the altered photo.
- For California advertising, add the statement and the link or the original images to the posting.
- In California, keep sky, dusk and lawn edits out of MLS photos. Elsewhere, check your MLS rulebook before you use them.
What happens if you skip it
The sources give limited answers, so here is what they say and what they do not.
- AB 723: section 10140.8 names no fine. We did not research enforcement beyond that. Do not read that as no consequence. Ask your broker or the California Department of Real Estate how the section is enforced.
- CRMLS: a warning, then a USD 250 fine if the problem is not corrected, per its knowledge base page updated July 24, 2026.
- Your MLS may remove the listing photo or take compliance action under its own rules.
- Misleading images are also a question of ethics under Article 12 for REALTORS®.
The cheapest fix is the same everywhere: label the asset, keep the original next to it, and do not change what the home is.