Although copyright law is rooted in human authorship going back to a Supreme Court decision from the 1880s, various cases involving fast-moving artificial intelligence technology are challenging that rule of law today, Chloe Hecht, senior counsel at the National Association of REALTORS®, said at the Risk Management Issues Committee meeting during the REALTORS® Legislative Meetings in Washington, D.C.

Hecht shared a few cases that illustrate the murky legal issues involving AI-generated works.

Plaintiff Stephen Thaler, for example, is suing the U.S. Copyright Office (in Thaler v. Perlmutter) because it denied him copyright for an image produced by his AI system, the Creativity Machine. He claims it was a work made for hire between himself and the AI generator. Despite various denials by the Copyright Office, “Thaler argues that human authorship isn’t required and, therefore, his work should be entitled to protection,” Hecht said.

Thaler has indicated he will appeal his case to the Supreme Court if necessary, she added. 

In another case, an artist and author wrote text for a graphic novel and created images using AI. The Copyright Office granted her protection initially but limited the registration to the text and arrangement of the images when it learned they were AI-generated. “But the author maintains she didn’t just input a prompt,” Hecht elaborated. “She took the image and asked AI to change and tweak it until it reflected what she wanted.”

Finally, Hecht described a case involving stock image giant Getty Images, which this year sued an AI company, Stability AI Inc., for using 12 million Getty images and their accompanying metadata to “train” its system. “That’s a sticking point for creators,” Hecht said of the technology. Someone developing AI uses others’ work to train their system, which lets AI generate new work based on those originals.

The cases leave a lot of unanswered questions for real estate practitioners and others seeking to use this evolving technology. Nonetheless, the Code of Ethics offers guidance, Hecht said, citing Articles 2 and 12.

Article 2 holds that “REALTORS® shall avoid exaggeration, misrepresentation or concealment of pertinent facts relating to the property or the transaction.” Article 12 says, “REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing and other representations.”

As an example, Hecht noted, “using AI to remove a structural crack from a wall violates those two Articles, but removing a hose and bucket accidentally caught in a picture is different.”

In addition, she offered three takeaways for using AI as safely as possible:

1. Always review AI-generated content for accuracy.
2. Don’t use AI to create a work you want to be able to protect.
3. Don’t assume any third-party content was created by AI and, therefore, available for your use. Always get permission in writing for the way you want to use the work, and save that documentation.

Artificial intelligence is enabling real estate professionals to streamline some of their work by generating instant responses to customers or even predicting the next client. But using the technology in your business comes with the potential for liability, warns Chloe Hecht, senior counsel for the National Association of REALTORS®.

In the latest “Window to the Law” video, Hecht details the risks for real estate pros, whether using AI for chat bots, personalized advertising or automated messaging. AI tools are being used to craft social media posts, draft property descriptions and improve lead generation, among other tasks. The public awareness of AI technology has increased due to the recent launch of platforms like ChatGPT and Stable Diffusion.

Hecht offers these tips when using AI tools in your business:

1. Watch for accuracy. “AI platforms are not 100% accurate, which makes your oversight critical,” warns Hecht. When using AI, especially to write listing content like property descriptions, you must ensure the information is correct. Hecht reminds NAR members that they are bound to the REALTOR® Code of Ethics, which prohibits exaggeration, concealing pertinent facts and misrepresentation in communication and representations to clients.
2. Watch for copyright laws. “Under U.S. copyright law, a work must be authored by a human to qualify for protection, meaning AI-generated works are not protectable,” Hecht says. However, laws governing AI are likely to evolve over time.
3. Watch how you use it. Avoid using AI to draft contracts, modify standard forms or provide legal advice to clients, Hecht says. She adds that many state laws, as well as Article 13 of the Code, prohibit the unauthorized practice of law. “AI is not a licensed professional, and the platforms make no reliable warranties or representations,” Hecht says.

It was 2016 when Jeff Turner, cofounder of Tangilla, a REALTOR® association management platform, gave his first presentation on artificial intelligence. At the time, Siri and Alexa were the only real examples of AI, so the urgency he conveyed wasn’t received by the audience.

Today, there are ChatGPT, apps like HeyAnnie, and websites like Humanistic.ai and heypi.com. AI is transforming the world at a much more rapid pace, and real estate is no exception. The foundational models of openAI and ChatGPT provide the infrastructure for what’s to come, much like a computer chip enables software. Society is at an inflection point with technology, almost unlike anything Turner—who has worked in technology since the first personal Macintosh computer came out in 1984—has ever seen. Even the internet wasn’t as transformative as what we’ll see with AI, he said.

But, he warned, the pace at which AI is advancing is unfathomable. “Think about it: When you went to bed on Nov. 29, 2022, none of this was possible. But you woke up on Nov. 30, 2022, all of this was possible,” Turner said.

It’s been a mere six months since ChatGPT launched and it’s already in its third generation. In the next six months, Turner said, “our heads will be spinning.” As an example, Turner says a customer can upload an entire real estate contract and talk it through with AI. A site like heypi.com can answer any question a customer might have about that contract. AI can help the customer understand risk, pricing, logistics—just about any aspect. “It’s pretty accurate. It’s also patient and kind because it doesn’t care how long it takes for me to get this information.”

Though he uses and loves AI, Turner is sounding the alarm once again. The conversations around regulation and control of AI should have happened in 2016. The conversation must happen now, and action must be swift, he said. Data privacy is one of the biggest risk factors for the real estate industry when it comes to AI. Real estate data is highly valuable, unique, and largely private, which is why policy is needed right away.

Turner proposed a four-point framework in which to discuss what policy and regulation might look like for AI:

1. Ethics. This is where transparency, fairness and societal impact come into play. Algorithms play a role in decision-making, so they need to be transparent and easily understood. Algorithms can also lead to bias, which, in turn, can lead to the unfair treatment of certain groups of people, so ethical guidelines need to be clear. There’s fear around AI’s potential to replace humans in certain sectors of the workforce. Policy must take into account the use of AI in real estate and the “broader societal implications, like job displacement or housing impact,” Turner said.
2. Bias. Right now, AI is trained by human beings—and human beings have implicit bias. In order to ensure that algorithms aren’t inherently biased, proposed regulations need to “define strategies for identifying and mitigating bias risk,” Turner said. There is potential, however, for AI systems to promote a more fair and equitable housing market, which should be the goal. Therefore, the use of “diverse and representative data sets” is needed to ensure that AI is developed in a way that minimizes bias.
3. Privacy. Privacy issues range far and wide in the age of the internet, and it’s no different with AI. Data must be protected, but that can be done only if strong and clear “measures to prevent unauthorized access or misuse of sensitive personal information used in AI-driven real estate applications” are implemented, Turner said. This also means clients and professionals need a clear understanding of what data is being collected and why—and they must be able to consent to this collection of data. Additionally, data must be anonymized in order to “protect individuals’ privacy and comply with data collection regulations.”
4. Control. AI tools will soon—if not already—have the capacity to make decisions based on the information received. It is imperative that AI have some form of robust human oversight to provide a checks-and-balances process, Turner suggested. A decision needs to be made on what roles government entities and the real estate industry will play in the regulation of using AI in home sales transactions. Turner said guidelines and policies must be clear and easily understood to “prevent misuse or unintended consequences. This kind of regulation cannot be done in a vacuum, though. The public and stakeholders need to be informed and have a say.”