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A Toronto real estate listing with fantastical renderings generated by artificial intelligence has raised questions about what the limits are for digital photo manipulation.

“I’ve been searching for properties for quite some time and I was thinking that’s a nice spot,” said Josh Kellendonk, a software developer living in Alberta who uses as he plans a move to Toronto. “Then second picture hits you in the face, and it’s just a dirty garage at the end of the day.”

The building for sale at 194R Chatham Ave. in Toronto is a single storey 46- by- 40-foot brick garage on a laneway between Chatham and Danforth avenues, just off the parking lot for Trull Funeral Home and Cremation Centre.

There were 21 photos in the original listing (asking price $588,000): six show the actual building in its current state of bare brick and wood under pealing paint, and 15 show elaborate renderings generated by AI.

The AI images of the Chatham garage are a mix: some depict the nearly windowless garage with its dirty concrete floors polished to a high gloss and laid out as a large one-bedroom loft with large windows. Some images invent new spaces – pushing out the walls to create nooks for furniture – others replace wooden rafters with steel beams and frankly an absurd amount of duct-work.

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194R Chatham Ave. in Toronto is a single storey 46- by- 40-foot brick garage.Re/Max Hallmark Realty Ltd.

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One of 15 elaborate AI renderings imagining what the space could look like.Re/Max Hallmark Realty Ltd.

“It’s got all the problems all AI generated images have. And there’s the subtle mistakes; areas in those photos where the internal dimensions of the building are completely wrong,” said Mr. Kellendonk, who filed a complaint with industry regulator the Real Estate Council of Ontario (RECO) over what he calls the misleading images. “The root of my complaint: it’s utterly divorced from reality.”

The images take the trend of virtual staging – where computer generated furniture and fixtures are added to real estate photos of empty rooms – to a new level.

“As pertains to Chatham, I knew folks would not be able to visualize the space,” said listing agent Robert Francis, a 12-year veteran with Re/Max Hallmark Realty Ltd. who posted the listing. He couldn’t recall the name of the AI platform used to create the images, but did say he had paid for a subscription to the service and he’s used AI in the past to generate virtual staging options for clients who were building new homes to help showcase potential finishes. He does traditional staging as well, where actual furniture is moved into a space and photos are taken, but cites the virtual tools as a cost-effective way to get across possibilities to clients.

As to Mr. Kellendonk’s complaint, the issue is when does “virtual” start to become misleading?

“There are no national rules with respect to photos and AI. Local boards may have MLS System rules for this, but at this time, there is no national rule or policy regarding the use of AI in property listings,” said Pierre Leduc, media relations lead with the Canadian Association of Realtors which maintains

In Ontario, all registered real estate professionals must abide by the code of ethics defined under the Trust in Real Estate Services Act (TRESA) and also any code of conduct for their local boards.

The regulations for TRESA include that “a registrant … shall make best efforts to ensure that any representations are accurate and; shall not engage in or be a party to misrepresentation or any unethical practice.”

The interpretation of that language is often left up to the individual.

“I’m not aware of any rule book. We just use common sense,” said Yuriy Setko, a realtor who runs BigPicture360, a Toronto service that does traditional real estate photography and videos as well as virtual tours and virtual staging. He’s happy to edit pictures to remove things such as recent steam-cleaning marks in a carpet, or to virtually erase trash bins from the front of a house because pictures were taken on garbage day, but there are limits to what he’ll edit out.

“When we are asked to remove a condo from a window, we refuse. What if people come and they say: ‘There’s a condo … there was a clear sky in the picture what is going on?’ You’ve got to stay way off from misrepresenting the property,” he said.

RECO did not respond to questions about the complaint, but on the topic of virtual staging it offered this statement: “RECO advises that buyers and their agents should always show due diligence by viewing properties for verification. Where some images have been enhanced to give a buyer a sense of the art of the possible with the space, then that should be specified in the listing by the brokerage or agent.”

Not every listing on with virtual staging images includes public warnings of the presence of digitally enhanced photos, though Mr. Francis did include a warning in the text of his listing: “Please note that some photos depict conceptual ideas, not actual representations.”

But for some in the virtual staging industry, a text warning may be insufficient for more extensive renderings.

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'[The] second picture hits you in the face, and it’s just a dirty garage at the end of the day,' says Josh Kellendonk, a software developer living in Alberta who uses as he plans a move to Toronto.Re/Max Hallmark Realty Ltd.

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'The root of my complaint: it’s utterly divorced from reality,' says Mr. Kellendonk.Re/Max Hallmark Realty Ltd.

“There’s a lot of rising demand and somewhat of a learning curve as people are adopting it,” said James Dylan Lloyd, business development manager of based in of Vancouver. “This one in particular the best example of the furthest end of the spectrum.”

Mr. Lloyd said Bella watermarks any image it substantially alters, and while it has experimented with AI the technology’s drawbacks mean the company prefers to stick with its team of human editors and designers.

“Some of the issues we faced is it will completely cover up aspects of the home: it will change power outlets, it will change the outdoors,” putting a blue sky in a window when there’s a heavy bush in reality, Mr. Lloyd said. “The concern with using AI is you don’t have much control: you can’t change certain outputs, so in essence each time it creates an entirely new image.”

The Chatham garage listing also has images that show more of a commercial space, like a restaurant layout (despite the garage being zoned residential only) and others that redraw the exterior to suggest a huge brick building sitting on top of the existing structure.

Mr. Francis made clear in an interview with The Globe and Mail that those are only possible uses, though not currently permitted.

“This site could build to a 10-metre height,” he said, though it would have to get permission from the city for that or for a commercial rezoning. “We did take those [exterior] pictures off; We just had a lot of folks calling and asking if it was part of a larger structure. We stayed away from that misrepresentation.”

Mr. Kellendork works with AI tools and isn’t suggesting it should be banned, but if his disappointment is any guide there may be an issue of trust when the virtual replaces the actual.

“If all realtors start to do this and all the listings that have this AI tooling on it, the value of the photos on there are going to be absolutely useless,” he said.

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