NSW Rental Ad Rules: AI Images And Four More To Add
If you have read that New South Wales is banning AI images in rental listings, you have read it wrong. Not your fault. Almost every headline said it.
The new law does not ban a single image. It requires you to say when you have altered one.
That distinction matters, because a ban would mean throwing out your virtual staging and a disclosure rule means adding a line to your template. But it is also the smaller half of the story. The same Act adds four more things a rental advertisement has to disclose, and each of them carries the same penalty as the photo rule. Those four have had almost no coverage at all.
Here is the whole list, and what each one actually asks of you.
One: Photos You Have Altered or Generated
If an advertisement includes digitally generated or altered images that would be reasonably likely to mislead or deceive someone, the ad has to state that the images are generated or altered.
Read that carefully, because there are two tests inside it and both have to be met before you have a problem. The image has to be altered or generated, and the alteration has to be capable of misleading. A colour corrected photo of a room that looks like the room is not the target. The government's own examples are furniture added to hide structural damage, and images that make a room look bigger than it is.
Virtual staging is the obvious place to start your review, because plenty of agencies already use it and most disclose it inconsistently or not at all. But do not stop there. A replaced sky. A removed powerline. A brightened interior that happens to soften a stain on the ceiling. The question to ask of every listing image is not what did we add, it is what did we make harder to see.
The Secretary can issue guidelines on what counts as reasonably likely to mislead. Those do not exist yet, so for now the judgement is yours.
Case Study
The Ceiling That Got Brighter
An agency lists a two bedroom unit and runs the photos through a styling tool. It adds furniture, lifts the brightness, and in doing so softens a stain on the ceiling under a known roof leak. The furniture was disclosed in the fine print as virtual staging. The brightening was not mentioned, because nobody thought of it as an alteration.
That is the exposure. The disclosure has to cover the edit that could mislead, not just the part that was obviously added. One line, written once, sitting in the template, would have dealt with it.
Two: Embedded Networks
If the premises include what the Act calls an exclusive supply network, better known as an embedded network, the advertisement has to say so and name the service it supplies. Electricity, gas, hot water, chilled water and internet are all covered, and regulations can add more.
In plain terms, an embedded network is where the tenant cannot choose their own supplier, or could only choose one by installing infrastructure or paying a connection charge. It is common in apartment buildings and increasingly common in newer developments.
This one appears twice. You disclose it in the advertisement, and you disclose it again to the tenant before they enter into the agreement. Two separate obligations at two separate moments.
There is a defence here that does not exist for the others. If you are an agent and you did not know about the embedded network, and could not reasonably have found out, that is a defence. Which tells you exactly what to do: ask the landlord, in writing, at the point you take the listing.
Three: The Landlord Lives There
If the landlord resides at the premises being advertised, the advertisement has to say so.
Short, easy to comply with, and easy to forget on a room in a shared house or a granny flat at the back of an occupied property. It belongs on your listing checklist rather than in anyone's memory.
Four: Restrictions On Keeping Animals
If something prevents animals being kept at the premises, the advertisement has to specify the restriction. That covers a restriction in an Act or other law, a local council order, a by-law of a strata or community title scheme that has legal effect, and a community rule of a residential community.
Notice what this is and is not. It is not the landlord's preference about pets. It is a legal restriction that sits over the property regardless of what the landlord thinks. If a by-law prevents animals, the advertisement has to name the restriction, not simply say no pets.
For anyone managing strata properties, this is a real piece of work. It means knowing the by-laws, per building, and having them somewhere your team can reach when a listing goes up.
Five: A Previous Tribunal Decision About Animals
If the Tribunal has previously allowed the landlord to refuse an animal at the premises, the advertisement has to say two things: that the Tribunal decided the landlord may refuse, and the species of animal that decision was about.
This is the one most likely to be missed, because the decision may predate your management of the property. It is worth adding to your takeover checklist when you bring a property across, alongside the by-laws.
Case Study
Two Disclosures, One Building
An agency takes on a management in an apartment building. The building runs an embedded electricity network, and the by-laws prevent animals. Neither fact was passed on when the management transferred, and neither appears in the advertisement.
That is two separate breaches on one listing, each carrying up to $5,500 for an individual and $22,000 for a company, before anyone looks at the photos. The fix is not legal work. It is a question on the form you use when you take on a new management.
What Each One Costs
All five carry the same maximum: up to $5,500 for an individual and $22,000 for a company.
The $22,000 figure has been reported widely as the fine for undisclosed AI photos. It is the company maximum, it applies to each of these five obligations equally, and it is a maximum rather than a set penalty.
Regulations can also require further information in every rental advertisement, and can prescribe the form and wording that any of these disclosures must take. So the template you build now may need one more pass later.
When Does This Start
These changes wait for proclamation, and none has been made. The government has said it expects the laws to take effect in early 2027.
Which is genuinely good news, because unlike most compliance changes this one is largely solved with a template and a checklist, and you have time to build both properly.
What To Do Before It Starts
Write your image disclosure line and put it in the advertising template, so it is there by default rather than remembered case by case
Agree internally what counts as an alteration. Staging, sky replacement, object removal, heavy brightening. Get your photographer and your marketing person in the same room for fifteen minutes
Add embedded networks, landlord occupancy, animal restrictions and Tribunal decisions to your new management form, and ask the landlord in writing. For embedded networks, that written question is also your defence
Get the by-laws for every strata property you manage into somewhere your team can actually reach when they are writing a listing
Check your portal upload process. If your disclosures live in a field that does not carry across to every portal, they are not in the advertisement
Most of this is systems work rather than legal work. It is much cheaper to build now than to retrofit across a live rent roll.
One Note On Scope
This article covers what a rental advertisement has to disclose.
The same Act does something larger on privacy: it brings landlords and agents under the Australian Privacy Principles, changes when you can ask for identification, and gives you two business days to destroy anything collected the wrong way. We have written that up separately.
Key Takeaways
AI images aren’t banned: digitally generated or altered images must be disclosed where they could mislead or deceive.
Five disclosures are covered: relevant image edits, embedded networks and their services, landlord occupancy, legal animal restrictions, and previous Tribunal decisions permitting animal refusal.
Penalties apply to each obligation: maximum fines of $5,500 for individuals and $22,000 for companies.
Prepare your processes: update advertising templates and onboarding checklists, ask landlords for information in writing, and ensure disclosures appear on every advertising portal.
Commencement is pending: the draft states the changes are expected in early 2027, with the start date still awaiting proclamation.
Next Steps
If you would like your advertising template and your new management form checked against all five disclosures before the rules commence, that is a short piece of work and a much better use of the time than fixing it afterwards.
Frequently Asked Questions (FAQ)
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No. You must disclose that an image is digitally generated or altered where the alteration would be reasonably likely to mislead or deceive. Using the image is not the problem. Staying quiet about it is.
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The obligation bites where the alteration could mislead or deceive. An image that has been altered in a way that hides a fault or misrepresents the size of a room is squarely in scope. Ordinary colour correction that leaves the property looking like itself is a different thing. Guidelines may come from the Secretary in time, and until then it is a judgement worth making conservatively.
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An arrangement where the supply of electricity, gas, hot water, chilled water or internet is organised other than by the tenant, and the tenant cannot choose another supplier without installing infrastructure or paying a connection charge. It has to be disclosed in the advertisement and again before the tenant signs.
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For embedded networks there is a defence if you did not know and could not reasonably have found out. That defence does not appear for the other disclosures, which is why asking in writing when you take on a management matters.
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Up to $5,500 for an individual and $22,000 for a company, for each of the five obligations.
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They wait for proclamation and none has been made. The government expects early 2027.
Luke Shumack – Principal, Realgate Legal
Luke Shumack is one of the Principals at Realgate Legal with a Bachelor of Laws and a sharp focus on helping agencies and business owners stay compliant while scaling with confidence. Since starting his legal career in 2021, Luke has worked closely with real estate agencies, startups, and established businesses on privacy compliance, employment law, contractor agreements, mergers and acquisitions, and corporate governance. Known for his tech savvy approach and love of efficiency, Luke blends legal precision with practical business strategy, making the complex simple for clients who want to move fast without risk.
Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS - congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.