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Sunday, April 29, 2012

Negative vacation rental reviews can be costly – to you

Tom and Terri Dorow didn’t like their recent vacation rental in Scottsdale, Ariz.

Their online review is a laundry list of complaints about equipment, appliances and even the appearance of a house they felt didn’t meet the expectations of a $3,500 price tag for five nights.

But don’t go looking for the Dorows’ opinion on the Web. Within a few days of posting it, they received a letter from their vacation rental agency.

“It has come to our attention that you have written an unauthorized review regarding your stay at a home managed by Progressive Management Concepts,” it said. “If this review is published by, you will be in violation of the confidentiality clause of the rental contract you agreed to when you made your reservation.”

When the Dorows refused to remove the review from, the site where they’d found the rental, Progressive Management promptly charged $500 to their credit card.

Progressive is among a small but apparently growing group of vacation rental owners and management companies adding non-disparagement clauses to their contracts. The agreement that Tom Dorow, a Sacramento, Calif., engineer, signed stipulates that he won’t “discuss or disclose the occupancy of the subject property with any entity not bound by the terms of this agreement without the expressed written authorization of the homeowner and the property agent representing the homeowner.”

Any violation will result in a $500 fine, it notes.

Dorow thinks this is unfair.

“We did not receive any contract language, terms and conditions or details until two weeks after we paid for the rental,” he said.

By then, he says, it was too late to back out.

Progressive says it’s impossible to make an online reservation without checking a box acknowledging that you’ve read its terms and conditions, which include the contract, but Dorow says he couldn’t find the contract online. He says he posted the review without having read the terms of the contract and was surprised by the credit card charge.

After a month of negotiations, the couple agreed to delete the review and got their $500 back, plus a $200 refund. But they aren’t happy with that resolution.

“We feel we should be able to post an accurate accounting of what we experienced, which did not match what they advertised,” Dorow said. “If other people are renting this house based on the information in the advertisement, then they need to know what they can expect.”

Progressive begs to differ. Chris Barski, an attorney for the company, said the Dorows contacted Progressive after their rental, demanding a $350 refund (Dorow says he asked for $375). When the company rejected that request, the couple published an unflattering review of the home, prompting Progressive to invoke its contract. (The Dorows say they’d always planned to write the review, refund or no.)

Barski also disputes the suggestion that Progressive’s contract is designed to squelch negative publicity. Rather, he says, it spells out the channels for addressing a dispute.

“The company requests that occupants resolve any complaints with management prior to publication with third-party websites, which are more often used to extract unwarranted concessions from small businesses to avoid negative publicity,” he said.

The vacation rental industry may be warming to rental contracts such as Progressive’s. Several property owners echoed Barski’s sentiments, saying that non-disparagement language is the only way owners can protect themselves from negative reviews.

“Just a small comment can slide a slight negative sentiment to a disaster like, ‘Avoid this house,’ and boom! You could lose everything and go into foreclosure, simply because of that one review,” said Ken Silverman, a principal for a New York-based land development company who owns a vacation rental at a New Hampshire ski resort.

“It would have to be offset by tens or hundreds of positives to not make a difference.”

Not all bad reviews are motivated by a negative experience, he adds. Renters who don’t get their entire deposit back sometimes threaten to publish a bad review.

“The problem is, it’s hard to document that fact, as often, guests will not admit that as the reason” for the negative review, he said.

Silverman recently revised his rental contract, adding what he called “a gag order on unsolicited reviews that comes with a stiff penalty if breached of up to $10,000.”

Other vacation rental owners are contemplating similar action. Jane Rosen, who runs a New York biotechnology company and owns a vacation rental in Palm Beach, Fla., says she may add non-disparagement language to her contract next year. But she also worries that the clause could make renters suspicious.

They “may walk away from the deal, as they might feel that the owner is hiding something,” she said.

Another worry: A contract that stops a review from being posted would be difficult to enforce. Rental owners and small management companies don’t have the resources to sue a guest who breaches a contract.

“Also,” Rosen said, “there would be nothing stopping a person who rented from having a friend who did not sign the contract write the false negative review.”

The dustup over non-disparagement clauses is focusing attention on the inherent problems of user-generated reviews. Online write-ups are difficult to verify. And savvy online reputation-management operatives can seed posts with favorable comments for their clients while slamming their competitors.

Preventing a damaging false review from being published may be as difficult as putting the kibosh on gag clauses. Carl Shepherd, the co-founder of HomeAway, which owns VRBO, says property managers sometimes slip such clauses into their vacation rental agreements. But since VRBO only connects homeowners with renters, it can’t prevent them from doing so.

He recommends that renters read their paperwork carefully.

“If that clause exists, I would move on to another property and patronize one of the hundreds of thousands of other vacation-home owners and managers who welcome my feedback,” he said.

The Vacation Rental Managers Association also takes a dim view of rental agreements that prevent customers from reviewing a property. Steve Trover, the group’s president, said clamping down on bad reviews runs contrary to the industry’s values.

“We encourage vacation rental managers to have open lines of communication with guests, and online reviews are an important part of that process,” he said.

At the same time, it isn’t hard to understand why a property manager would want to include a confidentiality clause. Renters may inadvertently reveal details about a property, such as lock combinations, safety problems and even the property’s street address, that could make it vulnerable to theft.

A close reading of the Dorows’ review suggests that they didn’t disclose anything that might have put the property in jeopardy.

“The notion that as a traveler you have to worry about being fined by your hotel or rental property if you didn’t enjoy your stay shows just how bad things have become in the world of online review sites,” said Travis Katz, chief executive of Gogobot, an online application that collects travel recommendations from friends.

“The Internet is supposed to be a marketplace of free ideas and free expression. However, it is increasingly becoming a place where businesses are trying to bully people – or even companies – into censoring ideas that could put the business in the wrong light.”

How can one avoid being ensnared by a contract that limits free speech? Read it carefully before you agree to and pay for a rental. And if you see something you don’t like, move on.

Christopher Elliott is National Geographic Traveler magazine’s reader advocate and the author of “Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals.”