02/09/2026
Effective January 1, 2026, new and updated California laws were introduced that directly impact brokerage operations, advertising practices, and the guidance brokers provide to agents and clients. These laws heighten expectations around transparency in listing marketing, expand and clarify inspection obligations for wood-supported exterior structures, and reinforce strict prohibitions on price gouging during declared emergencies. Brokers should understand these requirements to ensure office policies are compliant, agents are properly trained, and clients are accurately advised—reducing exposure to regulatory, civil, and disciplinary risk. Here is a summary of three of those laws along with helpful resources:
1. Digitally Altered Photos — New Disclosure Law (AB 723, Effective January 1, 2026)
Summary:
California Assembly Bill 723 establishes new requirements for real estate advertising that uses digitally altered images (including AI-generated modifications) in property listings and marketing materials. The law is codified in the California Business and Professions Code § 10140.8 and goes into effect on January 1, 2026.
Key Requirements:
Any real estate listing or advertisement using images that have been digitally altered (i.e., adding, removing, or changing physical elements such as fixtures, furniture, walls, landscaping, views, etc.) must include a clear and conspicuous disclosure indicating the image has been altered.
The unedited original image(s) must be made available — typically via inclusion in the listing itself and by providing a publicly accessible link, URL, or QR code that clearly directs the user to view the original image.
Normal photo adjustments (e.g., lighting, cropping, straightening) that do not materially change the property’s appearance are generally not considered “digitally altered” for this purpose.
Purpose:
Promote transparency and prevent misleading representations in real estate marketing, ensuring consumers see accurate depictions of property conditions.
See MetroList rule 11.6.1 update here
https://prospector.metrolist.net/documents/mls_rules/MLS_Rules.pdf
See MetroList’s Digitally Altered FAQ here
https://mic.metrolist.net/faq/
See CAR’s Quick Guide here (You’ll need your CAR Login to view this page) https://www.car.org/Notauthorized
2. Wood Balconies — Inspection and Safety Laws (SB 721 / SB 326 & Deadlines Extended)
Summary:
California law requires periodic inspections and maintenance of wood-supported balconies and other exterior elevated elements (decks, stairways, walkways, landings) on multifamily residential buildings. These requirements are primarily implemented through SB 721 and SB 326, with deadlines and cycles now aligned with current compliance timelines.
Key Elements:
a. Senate Bill 721 (SB 721)
Applies to multifamily residential buildings with three or more dwelling units.
Requires periodic inspection of Exterior Elevated Elements (EEEs) that are:
• more than six feet above ground,
• designed for human use, and
• supported in whole or in substantial part by wood or wood-based materials.
Originally, the first inspection deadline was January 1, 2025; it has been extended to January 1, 2026 by AB 2579 to allow more time for compliance.
After the initial inspection, owners must reinspect every six years.
Inspections must be conducted by qualified professionals (licensed architects, engineers, or licensed contractors with appropriate experience).
If hazards or conditions that pose imminent risk are found, owners must take immediate action to restrict access and repair or shore up structures.
b. Senate Bill 326 (SB 326)
Applies specifically to condominiums/HOAs with three or more attached units and also mandates inspection of wood-supported EEEs.
The initial SB 326 inspection deadline remains January 1, 2025 for condominiums; subsequent inspections occur on a longer cycle (typically every nine years).
HOA boards must ensure compliance and may face liability for failing to inspect or repair as required.
Purpose:
These laws are designed to prevent structural failures and improve occupant safety by ensuring early detection of wood rot, decay, waterproofing failures, or other hazards in elevated exterior structures.
See CAR’s Quick Guide here. (You’ll need your CAR Login to view this page)
3. Price Gouging — Emergency and Disaster-Related Price Controls
Summary:
Under California law (Penal Code § 396) and related emergency orders, price gouging is prohibited during and for a period after a declared state or local emergency. Protections currently apply in areas affected by recent emergencies (for example, wildfire and storm emergencies), with enforcement extended through applicable executive orders.
Key Provisions:
Price gouging refers to unjustified increases in the prices of essential goods and services during emergencies, including food, emergency supplies, medical supplies, building materials, gasoline, repair services, hotel accommodations, and rental housing.
Typically, the law prohibits charging more than 10% above the pre-emergency price for most goods and services; for items first offered after the emergency declaration, prices may not exceed 50% above the seller’s cost.
Protections are triggered immediately upon a state or local emergency declaration and can be extended by subsequent executive orders. For some ongoing emergencies, restrictions have been extended into 2026.
California explicitly includes rental housing and hotel/motel rates under price gouging prohibitions during emergencies; certain exemptions are provided (e.g., for new construction or in market zones to support housing availability).
Violations can trigger criminal penalties (misdemeanor punishable by up to one year in county jail and/or fines up to $10,000) as well as civil enforcement (penalties, injunctive relief, and restitution).
Purpose:
The statute is designed to protect consumers from opportunistic pricing that exploits the urgency and vulnerability of individuals during disasters or emergencies.
See CAR’s Quick Guide here (You’ll need your CAR Login to view this page) https://www.car.org/Notauthorized
