Source: McDermott Will & Emery

McDermott Will & Emery provides a comparative analysis of the legal and regulatory landscapes for artificial intelligence in the real estate sectors of the European Union, the United Kingdom, and the United States. The article highlights how AI is transforming the industry, from property valuation and management to tenant screening and marketing, while also creating new compliance challenges. In the EU, the comprehensive AI Act will impose a risk-based framework, classifying certain real estate AI applications, such as those used in credit scoring for mortgages, as "high-risk" and subjecting them to stringent requirements regarding data quality, transparency, and human oversight. The GDPR also remains a central piece of the compliance puzzle, governing the processing of personal data.

In the United States, the legal framework is more fragmented, consisting of a patchwork of federal and state laws. Key concerns revolve around fair housing and anti-discrimination laws, with regulators closely scrutinizing AI-powered tenant screening and advertising tools for potential biases that could lead to discriminatory outcomes. The UK, post-Brexit, is charting its own course with a "pro-innovation" and context-specific regulatory approach, which is generally seen as less prescriptive than the EU's AI Act but still emphasizes principles of safety, transparency, and fairness. The law firm advises that businesses deploying AI in real estate across these jurisdictions must adopt a nuanced compliance strategy that accounts for these distinct legal regimes to mitigate risks and leverage the technology's benefits effectively.