Artificial Intelligence empowers real estate agents to manipulate plumbing and floor layouts for their advantage
In the ever-evolving world of real estate, the use of Artificial Intelligence (AI) in property listings is becoming increasingly prevalent. However, this new trend has raised concerns about authenticity, transparency, and legal compliance.
Recently, a house in Durham, listed for £350,000 (around $468,000), was found to be using AI-generated images for its advertising. The images, while impressive, were not an accurate representation of the property's true condition. This misrepresentation could potentially violate consumer protection and real estate advertising laws, leading to liability for false statements.
Adrian Tagg, an associate professor of building surveying at the University of Reading, views the use of AI for imagery in property listings as a major red flag and a potential violation of the Property Misdescriptions Act. Tagg, who is both an academic and a practising chartered building surveyor, is obligated to deliver evidence-based opinions and hold a duty of care to deliver correct, appropriate advice.
One example of AI-generated images misrepresenting properties involves a house where an oven and countertop appeared in the kitchen where a radiator sits in reality, and the toilet in the bathroom switched walls entirely, with a floor-length curtain cutting through its waste pipe.
Other instances of excessive alterations include a magical toilet, TARDIS-like built-in wardrobes, radiator removal, and the flattening of a dog-leg section. Empty bedrooms in the listing are "staged" with virtual furniture, but structural elements are modified in the process, such as an en suite growing in size, its door turning half-transparent, and opening the wrong way.
Despite these concerns, some real estate agencies provide both genuine photography and a 360-degree walkaround of the house as it exists in reality, to act as a comparison to the AI-generated images. Startups like REimagineHome offer "virtual staging" of properties, filling empty rooms with furniture at the click of a button.
The impact on the authenticity of property descriptions is significant because AI-generated images can fabricate architectural features, landscaping, or interior details that do not exist. This can lead to potential legal liability for misrepresentation or false advertising.
California’s AI Transparency Act (SB 942), which will come into effect from January 1, 2026, aims to counteract deception by requiring creators or providers of AI-generated multimedia content, including images used commercially, to embed hidden watermarks with identifying metadata and provide users with visible disclosure labels and verification tools.
Copyright and IP issues also pose a challenge. AI-generated images without meaningful human input are not copyrightable, and users of such images bear responsibility for potential infringements or resemblance to copyrighted or trademarked content.
Industry rules, such as those from MLS organizations, enforce honesty and fairness in listings and photo use, expecting real estate agents to maintain oversight and integrity when integrating AI tools into their practices. Real estate professionals are cautioned to maintain transparency, explicitly disclose any AI modifications, and ensure that listings reflect the true condition of the property to uphold trust and legal compliance.
In summary, the use of AI-generated images in property listings can create potential legal and ethical issues if not handled responsibly. Transparency and explicit disclosure of AI involvement in images are crucial for legal compliance and maintaining buyer trust. California’s AI Transparency Act will soon require AI-generated images to carry a watermark and disclosure, increasing accountability. Copyright and IP issues mean users must be cautious about potential infringement when employing AI images commercially. Real estate professionals must use AI as an assistive tool with oversight, not as a substitute for accurate, honest property depiction. These regulations and emerging laws collectively strive to preserve the authenticity of property descriptions in an era of advanced AI image generation.
AI regulation in the real-estate sector is a growing concern, particularly with the increasing use of AI-generated images in property listings. These images, though seeming impressive, can sometimes misrepresent the true condition of the property, potentially violating consumer protection and real estate advertising laws.
The use of virtual staging software, for instance, can lead to deceptive practices like fabricating architectural features or modifying structural elements, which could constitute misrepresentation or false advertising.
California’s upcoming AI Transparency Act seeks to address this issue by requiring creators or providers of AI-generated multimedia content, including images used commercially, to embed watermarks and provide disclosure labels to counteract deception.
Additionally, copyright and IP issues arise when AI-generated images are used commercially without meaningful human input, as such images are not copyrightable and users may face potential infringement or resemblance to copyrighted or trademarked content.
Real estate professionals are advised to use AI tools responsibly, maintaining transparency, disclosing any AI modifications, and ensuring listings accurately represent the true condition of properties. Oversight and integrity are key to upholding trust and legal compliance in this evolving technological landscape.
