AI-Generated Images
When listing a property for sale it is only natural to want to present it as well as possible. For years, REALTORS® have worked with real estate photographers who were skilled at accentuating a home’s attributes. But with modern tools, this paradigm has now shifted with AI being readily accessible and capable of seamlessly and convincingly modifying any aspects of a property.
Recently, media has reported concerns about AI-created images in MLS® Listings that misrepresent the property to the extent of becoming false advertising.
This has resulted in some members reaching out to Cornerstone to inquire about the boundaries for enhancing images within the Cornerstone/ITSO MLS® System.
MLS® System Rules
The MLS® Rules are clear on this:
2.17 (d) Images may be digitally altered, including digital staging, provided the Images are not modified or altered in a manner that results in the Images inaccurately portraying the property (e.g., adding sun where there is no window).
This is in addition to the requirement within the MLS® Trademark that “The MLS® System includes an inventory of listings of participating REALTORS®, and ensures a certain level of accuracy of information…” Accuracy is baked into all content that is part of an MLS® Listing, including images.
Where the slope starts to get a little slippery, is with digital photography and “AI” photo editing that has made even extreme edits well within reach of anyone.
Legislation
As a REALTOR®, you need to be aware of the multiple layers of legislation that impact the use of AI-generated images.
RECO – While there are not any direct references to AI-generated images, there are numerous discipline decisions related to advertising false and misleading information. While each case is unique, typical administrative monetary penalties for this infraction range from $8,000-$10,000 with the higher amounts where consumers have suffered a financial loss.
Competition Bureau – The Competition Act also covers false or misleading representations and deceptive marketing practices. Under the criminal regime, the general provision prohibits all materially false or misleading representations made knowingly or recklessly. Under the civil regime, the general provision prohibits all materially false or misleading representations.
The sanctions available in the civil regime include an order to cease the activity, publish a notice, or pay a fine up to $750,000 for a first offence, or up to $10,000,000 if a corporation.
The criminal sanctions include a fine up to $200,000 and/or imprisonment for one year.
In the Bureau’s recommendations for advertisers, they warn against using illustrations that are different from the product sold and caution that no one actually needs to be deceived or misled for a court to find that an advertisement is misleading.
While this may be new technology without any direct cases, at either RECO or the Competition Bureau, this issue (if there were ever a complaint) would be around false and misleading advertising, not how the advertising was created.
ITSO Discipline Decision
ITSO’s Discipline panel concluded a complaint related to misleading photos in 2024 outlined below:
Incident 2024-51 involves a broker who used virtually staged landscape images on an MLS® Listing, where a pool was added to the backyard images and extensive landscape was added to the front images of the property. The PSC Committee investigated and issued charges alleging that the Respondent breached MLS® Rule 2.16(d) by using digitally altered images on an MLS® Listing with the result that the images inaccurately portray the listed property, specifically by including digitally altered images that contain a landscaped driveway and a swimming pool which do not exist; breached Article 13 of the REALTOR® Code by including images in advertising that inaccurately reflect the listed property, specifically by including digitally altered images that contain a landscaped driveway and a swimming pool which do not exist; and breached Article 17 of the REALTOR® Code for not complying with the Association’s rules. The Respondent admitted to the breaches and accepted a consent agreement that included a financial penalty of $1,250 and the requirement to complete the REALTOR® Code course and the MLS® Rules course.
Summary
While the incidental manipulation of digital images is acceptable, anything that fundamentally changes the material aspects of a home or property must be avoided. Virtual staging and placing furniture and accessories (so long as they do not appear to be a fixture) is generally okay and an acceptable use of AI.
But material features that are added to a home or property (like a swimming pool, gable, landscaping, etc.) or removed from a photo (utility boxes, trees, etc.) will create a serious risk to the listing agent.
If you have any questions or concerns, please reach out through communications@cornerstone.inc
