Generative AI (GenAI) is revolutionizing the way real estate agents do business. It’s being used to assist in essential tasks such as crafting property descriptions, improving listing photos through virtual staging, creating social media content with improved SEO performance, and even generating property valuations for listings. As this list of potential use cases grows, interest in and use of GenAI tools within the real estate community continues to intensify.
However, as is true with any new technology, use of GenAI tools is not without risk, and raises a number of important legal and ethical questions that must be considered. The good news for you is that while GenAI may be relatively new, the risk mitigation strategies required to successfully navigate this landscape are not. The key lies in remembering that whether you’re relying on support from an administrative assistant, another member of your team, or a GenAI tool, you are ultimately responsible for the materials that are produced and used. As such, prudent agents and their brokers should review any content generated (outputs) using GenAI technology to verify compliance with applicable contractual, legal, and ethical requirements. This includes, but is not limited to, verifying the following elements:
Accuracy
Review all generated content for accuracy. For instance, if GenAI is used to enhance property photos by decluttering existing rooms or virtually staging an empty space, make sure that permanent fixtures aren’t removed (e.g., an unsightly water tower) or features that don’t exist in the space aren’t inadvertently added (e.g., an extraneous window or door). Oversights like these can result in claims of misrepresentation or false advertising as they conflict with your obligations for honesty and truthfulness under Articles 2 and 12 of the NAR Code of Ethics.
For full transparency, consider disclosing the use of generative AI tools or AI-aided documents up front. Make sure potential buyers understand that GenAI tools are used to provide a blueprint for the way a space could be arranged and is not necessarily a representation of how it actually appears in its current state.
Confidentiality
Avoid revealing confidential, proprietary, and personal information belonging to your client, brokerage, or others. The user licensing agreements or terms of use for most GenAI platforms, such as ChatGPT or Midjourney, specify that the platform is permitted to use any information that you provide for the purposes of training their models. For this reason, make sure that you protect all personal and proprietary client data. Otherwise, it could result in a violation of your obligation to protect the client’s interests under Article 1 of the NAR Code of Ethics.
Be mindful that GenAI platforms are also subject to cybersecurity vulnerabilities like any other website. It’s important to properly vet the platforms being used and be cautious in the information shared (inputs) with these platforms. Take care to scrub any inputs of protected or personal information.
Intellectual property rights
Avoid using copyrighted materials and using GenAI tools to create content you want to protect. GenAI-created content poses risks relating to intellectual property rights for several reasons. For instance, if you were to use a GenAI platform to create a brand logo or catchphrase:
(1) it could result in an inadvertent violation of intellectual property rights if the generated content incorporated images or phrases that were copyrighted or trademarked by others; and
(2) the generated logo or catchphrase may not be protected by US copyright.
This could leave you unable to prevent competitors or others from using your logo or catchphrase if it was created using GenAI tools. View Copyright Registration Guidance: Works Containing Material Generated By Artificial Intelligence for a more in-depth overview of the US Copyright Office’s stance on copyright protection for AI-generated content.
Fairness
Ensure all content created using GenAI tools complies with your legal and ethical obligations. GenAI platforms are only as good as the underlying data used for training, so if there are biases in the original training data, that can result in distorted or biased outputs. For instance, property descriptions that are crafted using a GenAI platform might include language such as “great schools,” “ideal for empty nesters,” or “perfect for students.” This type of language can violate fair housing laws and your obligations to the public of non-discrimination under Article 10 of the NAR Code of Ethics. More tips on meeting your legal and ethical obligations to uphold fair housing laws can be found in NAR’s article, Avoid Fair Housing Violations in Advertising, and on NAR’s Fair Housing Resources webpage.
Competency
Seek advice from appropriate professionals. GenAI tools should only be used to assist in tasks within the firm’s field of expertise or for which proper oversight and review can be arranged. For instance, GenAI platforms should not be used to craft contract language, modify standard terms, draft amendments, or provide legal advice to clients. Such acts can result in the unauthorized practice of the law and violate your obligations of providing services within your field of competence under Articles 11 and 13 of the NAR Code of Ethics. More information on avoiding the unauthorized practice of law can be found in NAR’s Window to the Law video.
Additionally, your brokerage or local REALTOR® association may offer guidance on the use of GenAI technologies by way of an AI use policy or training. These resources might include:
(1) recommendations for preferred GenAI tools or platforms;
(2) training on how to use the tools responsibly. For instance, how to opt out of inputs being used for training data, or how to scrub inputs for any confidential or personal information to avoid inadvertent disclosures; and
(3) tips on how to review GenAI content for accuracy and compliance with your legal and ethical obligations.
Conclusion
By considering these points, you can harness the power of GenAI to enhance your business in a legally and ethically responsible manner. On the off chance that a claim is made against you, Victor’s Errors and Omissions (E&O) policy may be able to help. Find out how by reading, Safeguard your success: The importance of E&O coverage for your business.
Victor and the National Association of REALTORS® have partnered under the NAR REALTOR Benefits® Program to provide a first-class errors and omissions (E&O) insurance program for REALTORS®. Several premium credits are available, as allowed by state law, including a credit for being an NAR member or holding select NAR designations. Receive a free quote today by completing an application. Be sure to note your NAR Member ID on the application. For more information, visit here or you can contact us at realestate.us@victorinsurance.com.
