Have you used artificial intelligence today? Maybe you asked ChatGPT to draft a listing description, summarize an inspection report, write an email to a difficult client, or brainstorm a social-media post. If you have not, there is a good chance one of the agents you supervise has.
AI can be an extraordinary tool for real estate professionals. It can save time, improve communications, organize information, and help agents work more efficiently. But AI also creates a new category of brokerage risk. It can confidently invent facts, expose confidential client information, inadvertently generate discriminatory advertising, misstate property characteristics, and even produce contract language that sounds convincing but is legally wrong.
The above examples are only a few of the many reasons why every real estate brokerage needs a thoughtful, written AI policy. Arizona brokers operate in a highly regulated environment in which supervision, advertising, transaction review, fair housing, confidentiality, and recordkeeping matter. A written AI policy should not prohibit AI. In fact, the better approach is the opposite: brokers should establish practical rules so agents will use AI productively without creating unnecessary liability.
Here are five issues every brokerage AI policy should address.
- AI Is an Assistant, Not the Broker
The first rule should be simple: AI does not replace professional judgment. An AI generated response may sound authoritative even when its answer is incomplete or simply wrong. Agents remain responsible for what they publish, send to clients, place in the MLS, or incorporate into transaction documents. A good policy therefore requires human review and independent verification of material facts before AI-generated work leaves the brokerage. This is especially important because Arizona’s broker-supervision rules require employing brokers to maintain written policies, procedures, and systems addressing the supervision of licensed activities. AI should be treated as part of that supervised activity, not as a shortcut around it.
- Protect the Client’s Confidential Information
Imagine an agent uploads a purchase contract, settlement statement, inspection report, or client financial information into a free AI platform and asks for a summary. Where did that information go? Will it be retained? Can it be used to publicly train the AI? The real estate agent may not know. A written policy should identify approved AI tools and prohibit real estate agents from placing confidential or sensitive information into unapproved systems. Even with an approved tool, agents should use only the minimum information necessary and delete identifying information whenever practical.
- Fair Housing Rules Still Apply
AI does not get a free pass from fair housing laws. An agent might ask an AI tool to identify the “best neighborhood for young families,” write an advertisement for “young professionals,” score leads, or target online advertising. Those prompts and outputs can create steering or discrimination concerns. A brokerage policy should make clear that AI cannot be used to discriminate, steer, exclude, discourage, or prioritize consumers based on protected characteristics. AI-generated neighborhood descriptions, lead scoring, advertising audiences, and client matching deserve particular scrutiny.
- Do Not Let AI Mispresent Property Conditions
One of the most common risks facing brokers is claims against agents for misrepresentation regarding statements made about the property’s condition. AI can write beautiful listing descriptions. Unfortunately, it can also invent a remodeled kitchen, mountain view, school district, square footage, community amenity, or other features that do not exist. The same problem arises with AI-enhanced photographs and virtual staging. A written policy should require agents to verify every material representation and prohibit AI-generated or altered content that misrepresents the actual property. Arizona advertising rules do not disappear merely because a computer wrote the advertisement. The responsible licensee and broker remain responsible for the final content.
- Be Careful When AI Touches the Contract
AI can be useful for organizing documents, summarizing contractual provisions, or helping an agent prepare questions. But an agent should not rely on AI to decide legal rights, interpret contractual obligations, draft novel legal provisions, or independently negotiate a transaction. And an agent should always be mindful not to provide unauthorized legal advice to the client or otherwise engage in the unauthorized practice of law. A brokerage should require human review of any AI-assisted transaction document and prohibit automated systems from accepting, rejecting, countering, or modifying contractual terms without an authorized person in control. The faster the technology becomes, the more important this guardrail will be.
The Bottom Line
Short of a cataclysmic EMP, AI is not going away. The question is not whether real estate professionals will use it? They already are. The better question is whether the brokerage will establish appropriate policies before something goes wrong and a client is harmed? A thoughtful written AI policy gives agents clear boundaries, gives managers a framework for supervision and training, and gives the brokerage a defensible process for handling new technology.
For decades, brokers have been at the cutting edge of technology and masterfully integrate new and improved tools in their practice. But just as with any new tool, caution and wisdom come first. Successful brokers will embrace AI while remembering a basic principle: the technology is artificial, but the broker’s responsibility is very real.
If you or your broker need help preparing an AI policy, contact Provident Law® at 480-388-3343 or online to schedule a consultation with Christopher Charles.
Christopher J. Charles is the Founder and Managing Partner of Provident Law ®. He is a State Bar Certified Real Estate Specialist and a former “Broker Hotline Attorney” for the Arizona Association of REALTORS ® (the “AAR”). Mr. Charles recently authored Arizona Real Property Law and Practice published by Lexis Nexis in 2026. https://store.lexisnexis.com/en-us/products/arizona-real-property-law-and-practice.html And Mr. Charles serves on the State Bar Real Estate Advisory Commission. In 2017, Mr. Charles obtained one of the Top Ten Civil Verdicts for his client in a real estate dispute. Mr. Charles holds the AV ® Preeminent Rating by the Martindale-Hubbell Peer Review Ratings system which connotes the highest possible rating in both legal ability and ethical standards. He serves as an Arbitrator and Mediator for the AAR regarding real estate disputes; and he served on the State Bar of Arizona’s Civil Jury Instructions Committee where he helped draft the Agency Instructions and the Residential Landlord/Tenant Eviction Jury Instructions. He has taught continuing education classes at the Arizona School of Real Estate and Business, and he can be reached at Chris@ProvidentLawyers.com or at 480-388-3343.