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Travel

The Navigator: In vacation rentals, negative reviews and non-disparagement clauses

By Christopher Elliott,April 11, 2012

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

Their online review is clear about that. It’s 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 VRBO.com, 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 VRBO.com, the site through which 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, an engineer based in Sacramento, signed stipulates that he will not “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 of the rental. Progressive says that 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 that he couldn’t find the contract online. He says that 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 an additional $200 refund from Progressive. But they aren’t happy with that resolution.

“We feel that we should be able to post an accurate accounting of what we experienced, which did not match what they advertised on the VRBO site,” Dorow says. “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 that the Dorows contacted Progressive after their rental, demanding a $350 refund (Dorow says he asked for $375). When the company rejected their request, the couple published an unflattering review of the home, which prompted Progressive to invoke its contract. (The Dorows say that they’d always planned to write the review, whether or not they received a refund.)

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

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

The vacation rental industry may be warming to rental contracts such as Progressive’s. Several property owners echoed the sentiments of Barski, 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,” says Ken Silverman, a principal for a land development company based in New York who owns a vacation rental property 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 the 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 says.

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.”