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While the state has already passed legislation that requires advertisements for property sales to disclose AI use, a new bill would extend the same rules to rental properties as well.
Rhiannon Mulligan's frustrating house-hunting experience in Sacramento, where digitally staged photos misrepresented the actual size of rooms, served as the catalyst for the proposed legislation. This incident highlighted the deceptive potential of AI in real estate listings, prompting her to share the ordeal with her boss, Assemblymember Gail Pellerin.
Building on existing legislation that requires disclosure of AI use in property sales advertisements, Assemblymember Gail Pellerin introduced AB 2025. This new bill aims to extend the same transparency rules to rental property listings, requiring landlords to disclose digitally added elements like furniture or landscaping, ensuring renters have accurate information before viewing or applying.
AB 2025 mandates disclosure for "material changes" made using AI, such as adding non-existent furniture, but exempts routine photo adjustments like lighting. The California Department of Real Estate is tasked with enforcing the law, primarily through warnings, to establish a clear standard for real estate licensees and prevent competitive disadvantages for those not using digital staging.
California is currently a leader in establishing legislation concerning AI use in the real estate sector, with AB 2025 emphasizing transparency for consumers rather than punitive measures. While New York has a similar bill proposing to classify misrepresentations as abusive acts, California's approach focuses on fostering an honest and transparent real estate market with regard to AI applications.
AB 2025 has garnered significant bipartisan support and successfully passed the Assembly, now awaiting consideration in the Senate after the summer recess. Despite its broad backing, Senator Tony Strickland voiced opposition, arguing that existing laws already prohibit misleading advertising and expressing concern that the bill might impose unnecessary burdens on compliant landlords without effectively deterring bad actors.