Help! This rental deposit is nonrefundable — and now I’m being muzzled

By | June 26th, 2016

After Kim Thomas rented a five-bedroom home in Dallas this spring through HomeAway.com, she made three troubling discoveries:

First, the deposit was nonrefundable. Period.

Second, she wasn’t allowed to criticize the deposit’s nonrefundability or she would face litigation.

And third, HomeAway.com, would not do anything to help her.

“I would like for this owner to return this questionable reservation deposit,” she says.

How did this happen? Interesting question, and it really underscores one the biggest problems with the rapidly expanding, “anything goes” vacation rental market. In order to make an extra buck, owners are throwing “gotcha” clauses into their contracts for everything from nonrefundable deposits (which technically isn’t even a deposit, come to think of it) to gag clauses that effectively prevent an unhappy tenant from publicly complaining about the arrangement.

Thomas forwarded the the agreement from her property. It was, at best, murky. It mentions a deposit, and suggests it might be refunded under certain circumstances, but then says “the entire payment is nonrefundable” and also says the tenant agrees “to take no action to harm [the owner] or her reputation or which would reasonably be expected to lead to unwanted or unfavorable publicity.”

Here’s the entire agreement if you’re curious.

“We arrived as planned and stayed in this property for three nights, departed as scheduled, leaving the home in good condition,” she says.

About a week later, she sent a message to the owner asking about refunding the deposit, assuming she had processed it.

Her response? “She had no intention of refunding or returning a deposit because this is not refundable, nor applied to the rental cost, as I understand is usually the case with this type of deposit,” she says. “We had several messages exchanged, where I do not believe I was disrespectful at all, just stating my disappointment with this seemingly unreasonable policy, and effectively $1,050 in fees, including cleaning, which is normal, and reservation deposit, which seems to be a fee, rather than a deposit, since it went toward nothing. Her communications were abrupt, and she maintained that nothing would change in her policy.”

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At that point, Thomas said she felt frustrated.

“After attempting to resolve with owner I submitted a negative review about the experience,” she says. “I rated it two stars, which I would reduce to zero at this point, given further unpleasant communication and accusations from owner.”

After several more messages, Thomas had had enough. She asked the owner to stop communicating with her. The owner responded by saying she was “harassing” her and violating her lease agreement.


“The next message I received, within moments of the exchange where she accused me of harassment, was a message that she had filed a claim with property damage company about a damaged Baccarat crystal champagne flute,” she says. “Nothing had been mentioned about any damage to anything for a month, and upon this unpleasant exchange about her ‘no refund’ reservation deposit, she came up with damage at that moment.”

Thomas insists she didn’t damage anything in the home.

“Given the timing of this damage claim, and her previous accusation of harassment, I suspect that the owner is somehow building a case to make a reason to refuse the deposit, and possibly pursue legal action against me,” she says. “I likely cannot prove that the damage did not occur, but the timing and failure to mention such damage until I questioned the deposit seem questionable.”

Thomas wants our advocacy team to wade into this morass. There’s a lot going on here. We’ve covered gag clauses and the challenges of industry consolidation and the growing pains of the vacation rental industry. You really can’t blame owners for adding these fees and gag clauses — they are just trying to protect their businesses.

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But it’s also true that there’s little regulation, and owners can make the rules up as they go. This particular owner could have inserted any clause in the contract, and someone like Thomas would have signed it. No one reads the contract.

I’m just not sure who to turn to. Would HomeAway help? So far, it hasn’t, insisting this is a matter between Thomas and the owner. And it’s not as if HomeAway can impose a standard contract on its homes. It can’t even force its owners to use a single payment system.

Thomas says the owner has pocketed her entire deposit over a trumped-up damage claim. I’ve reviewed the correspondence between the two parties, and needless to say, the owner disagrees.

Should our team try to mediate this case?

Should we take Kim Thomas' case?

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Update: We contacted HomeAway about this case. Also, we’ve received several threatening emails and a phone call from the owner, who has accused us of publishing “private” information about her. We have done no such thing. We simply linked to a Dropbox file that we believe she herself posted online.

Here’s the HomeAway response:

Unfortunately the traveler submitted payment before fully understanding the terms of the rental agreement. She contracted directly with the owner and the withheld amount is a fee charged by the owner. However, we contacted the owner and the ambiguous language about the fee has since been updated to be more clear that it is non-refundable.

We recommend travelers speak with owners to clarify any outstanding questions and fees before paying for or placing a deposit on a rental.



  • AAGK

    So glad you linked to this property. Kim may not be supposed to talk about it but we can and that owner sounds dreadful. Her response to Kim’s very rational and well written, informative review was incoherent and rude. The owner sounds unbalanced. The parking issue alone would have been enough for me.

  • John Galbraith

    It also looks like this agreement has been amended incorrectly. At clause 5 it starts by saying “Quiet enjoyment” the Landlord covenants and agrees… It then bizarrely goes ton to say that the “tenant agrees to peaceably and quietly enjoy premises without outside noise.” What that should say is the Landlord agrees to let the tenant enjoy the property. That is what a quiet enjoyment clause is – the landlord allowing the tenant quiet enjoyment of the property without interference.

  • John Galbraith

    Even more bizarre clause 7.6 deals with damage NOT caused by the tenant “.

In
 the 
event 
the 
Premises
 are
 destroyed 
or 
rendered 
wholly 
uninhabitable
 by 
fire,
flood,
weather,
earthquake,
or 
other
casualty 
not
 caused
 by
 the
 negligence 
of
 Tenant…” “The
Tenant 
shall
be 
liable 
for 
any 
and 
all 
damages
 to 
Premise.” So there is an earthquake and the tenant is liable for the damage!

  • mbods2002

    Horrible owner. Lesson in reading every little detail. It’s almost like we have to take these “agreements” to a lawyer first to read over! Booooo

  • technomage1

    Sounds to me like she needs a lawyer, honestly.

  • Rebecca

    The owner wouldn’t let them park on the property, the neighbors came out and said they couldn’t park on the street, so the owners solution was to use a grocery store lot and move cars every 3 hours, lest they get towed? And it’s meant for a larger group of people, presumably with several vehicles? Right there I’d give you one star. That’s outrageous, I would be so pissed.

    And because not everyone will click over, here’s the response the owner posted to a well reasoned, polite review:

    “This person is not welcome and is in serious violation and will be dealt with accordingly. We have noted this public and unwanted action to harm.”

    What a wacko. Such an odd response to a review. Although I really want to know what “serious violation” she’s committed? Leaving an honest review? Requesting her deposit back? The nerve!

  • AAGK

    Also, who files an insurance claim over $200 (the broken glass).

  • Travelnut

    What we can also do is upvote her review as helpful. I’m going to upvote it on all of my devices.

  • Barthel

    I doubt that legal action could be pursued against the tenant for posting negative reviews providing they were factual. I would think that part of the contract is illegal. How would the owner know who posted the reviews anyway? If the tenant is concerned about legal action regarding negative reviews, she should get her friends, lots of them, to post the reviews.

  • jklmrm

    And look at the review above hers – obviously written by the owner herself.

  • Annie M

    This is one of the most screwed up rental agreements I have ever read, with constant contradictions in the document itself. For instance:

    the
 non
refundable 
$800
 reservation
 fee upon initial
 confirmed 
reservation,
required
 $99 
paid
 directly 
to CSA
Property
Damage
Protection,
and
HomeAway/VRBO 
service 
fee.

    Then later is says they about the non refundable deposit :

    within 
two
 weeks 
of
 departure
 to
 retain 
any
 or 
all 
of 
the 
reservation 
fee,

    
due to
 high 
season,
wear, tear o
r
 breakage for
 damages

    So which is it? Did the landlord mention to Kim within 2 weeks of departure about the glass? If she didn’t, it would appear she is SOL. And if he didn’t provide the rental agreement to Kim until 3 months AFTER she returned – Kim should take her to small claims court.

    Chris, I thin you should mediate. This landlord sounds a but nutty. I am also not certain if Kim received this rental agreement to review before she made her deposit or after. This is something that should have been read before any money changed hands.

  • Rebecca

    If there is any ambiguity, that would favor the OP. I skimmed, and it does appear to completely contradict itself. My guess would be the owner had a standard agreement, then changed part of it to reflect her desire to keep the deposit, but then wasnt smart enough to change the other part. She honestly sounds totally bat crazy.

  • Rebecca

    Agreed. I downvoted that one. Should help move it down and this OP’S review up.

  • AAGK

    I upvoted as well. The homeowner seems to have voted no a million times though. We have to try not to engage the crazy- and this owner falls into that category.

  • Travelnut

    You are right, that one sounds like the owner wrote it. Downvoted!

  • Sue

    If this rental is so Spectacular then why are there only 2 bookings in the next 3 months?

  • Alan Gore

    Kim can ignore the gag order because it can’t be enforced so long as her review sticks to the truth and does not cross the line into defamation.

  • technomage1

    It appears a third party, trustpilot, is the review system for homeaway. I couldn’t find much in their FAQ, but I do think they’d be interested to know someone is imposing a gag order to only get positive reviews.

  • M B

    One consideration is to check with the city/county/state departments that issue business licenses to confirm that the rental of the property as a short term rental is legal. If the property is required to be licensed but isn’t, it’s likely the contract isn’t enforceable.

  • AAGK

    Yes!!! The great parking comment.

  • AAGK

    Me too!

  • AAGK

    Good call. I wonder. I live in New York, where it’s prohibited and even in the beach areas out of the city, many of the local municipalities prohibit this as well.

  • AAGK

    II didn’t read it bc the owner’s reply was so crazy that I don’t care what it says.

  • AAGK

    Another idea, this owner is essentially selling parking in a privately owned lot. It’s one thing to direct a houseguest there, quite another to advertise great parking and send paying guests to trespass. Perhaps this angle is worth pursuing, for leverage.

  • M B

    It’s regulated in most places at least to the point that sales tax must be collected. It can be even more so in other municipalities. Key West has very strict laws on short term (less than 30 days) rentals. It’s can be a nuclear option if tax collection is required but not being done.

  • Tracy Larson

    So does Monroe County. I’m in Islamorada and we have to collect county taxes and state taxes, which comes to 12.5% for every rental we do. And we need two licenses – one for Monroe County and one for Islamorada

  • joycexyz

    And who leaves Baccarat in a rental???

  • AAGK

    Or at least lock the cabinet. This owner seems rigid. There is no way she would allow the guests to freely use her crystal, if it exists.

  • Joe_D_Messina

    Several parts of the contract would likely get shot down in court. The clause where damage from natural disasters is the responsibility of the tenant being another example.

  • Joe_D_Messina

    Without a separate charge in the agreement for parking I don’t see that argument working. It wasn’t really trespassing as it is a public business lot.

    Biggest question I have about the terrible parking situation is what previous guests had done. Several earlier reviews reference large groups and how the house was perfect for entertaining. The glowing reviews suggest those previous guests weren’t in a grocery store lot with neighbors telling them they couldn’t park on the street. Awfully strange to rent out your house and not give the guests access to the driveway which is what happened to the letter writer. Sounds like this owner kind of went nuts over time.

  • Joe_D_Messina

    I feel sorry for the person because they did everything right. This place has glowing reviews. Makes you wonder if the owner changed because some other guests would have noted the parking issues if the driveway had been off-limits and they’d been forced to use 3-hour parking for the entire stay. Who rents out a house without giving people the code to park in the driveway? Particularly somewhere where street parking isn’t allowed?

  • cscasi

    Wouldn’t CSA Property Damage cover the flute if it was broken? Isn’t that what the $99 was for? And for the property owner to wait for two weeks or more to “discover” that the renter had broken the flute (and only after all the exchanges about the return of the deposit), is more than ludicrous!

  • cscasi

    While Agree with what has been written here, I wonder why it is that all the other 12 comments left on the HomeAway website are 5 star? Are all those phony?
    Having said that, could it be that the property owner changed the contract to try to make the deposit non refundable just before Kim Thomas rented it? I would think if that was in place the whole time, at least a couple of the others before her would have complained about it, rather than all of them being highly positive; that or not having written anything at all.
    Nonetheless, I hope that Chris and his team can make some sort of headway with this and perhaps get a somewhat fair compromise as opposed to nothing at all. I really cannot understand why on would make a deposit non refundable (although I guess there are properties that do). As for the claimed breakage of the flute (after all the back and forth started), wouldn’t the CSA Property Damage $99 fee indicate there was property damage insurance that would have covered the breakage (if indeed it occur while Kim was there; which I really doubt)?

  • AAGK

    Of course. My point was aimed at helping the Renter recover some leverage.

    A couple of ex. looking into the local ordinances or homeowner’s association rules, informing the grocery that the Owner is directing her short term hotel guests to use their lot so that they start towing, etc. it sounds like the property is near a college so I imagine it attracts families on graduation weekends, etc. she could inform the school to warn parents making reservations that this is not a recommended property.

  • MarkKelling

    The fact that all the reviews of this property are 5 star is suspicious and makes me doubt they are real. Not even a single 4 or 3 star review? Has the owner pressured everyone to rate them as such or sued anyone who left a lower rating to remove it?

    A “non-refundable deposit” is only non refundable in cases where the renter does not show up and is designed to keep the owner from having a complete loss. It is never just a fee that the owner gets to keep in addition to full payment of the rental price by the renter. Most places I have rented simply apply the deposit to the rental cost.

    Every one of these stories makes me less likely to want to rent from any of these companies which actually makes me sad since the concept is something that works well for me.

  • LeeAnneClark

    My take? This crooked landlord (Frances Rogers) didn’t understand what a security deposit is. She thought that the $800 security deposit was just free money that she gets to keep on top of the rental fee. Then, when this renter reasonably asked for her deposit back, Frances got all “oh noes, I don’t want to give it back!” and realized she would have to trump up a reason to keep it – thus the BS “damaged champagne flute”.

    Chris, please PLEASE help this gal. She got snookered but good by a real rat.

    This case in particular is vexxing to me. I have a cottage rented in CT for September through FlipKey (similar to HomeAway) that has a $500 “Refundable Damage Deposit”, which is extremely steep given that I’ll only be there for four nights so if he were to keep it, it would nearly double what I’m paying for it. I carefully read our agreement and it’s stated in very clear terms that in the absence of damage it will be fully refunded. There’s also a cleaning fee of $65 (acceptable), and a “booking fee” of $90, which is not refundable and not applied to the rental cost. All of this is clearly spelled out in the agreement, which is written in easily understood English – unlike that twisted-syntax mess of an agreement provided by Ms Rogers.

  • pauletteb

    Only properties with something to hide would force a muzzle clause.

  • Rebecca

    The reviews on there are very obvious fakes. I suppose it’s possible the owner changed. Maybe the original owner died, and this Frances Rogers inherited the home? That would also make sense in terms of the nonsense rental agreement. The deceased had a lease, which was then altered to make no sense in an attempt to keep the security deposit.

    If you look at the reviews, every single one talks about how unbelievably wonderful the owner is. What a narcissistic nutjob.

  • Rebecca

    I googled the landlord’s name out of curiosity. And I found a very primitive website, built with a template. You absolutely have to read the “about us” page to get an idea of what the OP had to deal with.

    http://www.francesrogers.com/About-Us.html

    Here’s an example from the page:

    “Frances Rogers has been in the Design business for 25 years. Her career began with launching LAURA ASHLEY in the United States. Frances worked with Sir Bernard and Laura Ashley and their son Nick Ashley to bring English home furnishings, printed fabrics, wedding gowns, and clothing into homes around the globe. The “Laura Ashley style” was in magazines, movies, commercials, and Show Houses.”

    And just one more. My personal favorite:

    “Frances credits her sense of style to family friend Nancy Lancaster, who was a niece of Lady Astor…..”

  • Rebecca

    If you want to see the kind of crazy this is, I googled her name and found a website. The “about me” gives a good idea of what the OP is dealing with:

    http://www.francesrogers.com/About-Us.html

  • AAGK

    Ha! I never was a Laura Ashley fan, I’m not into florals. Excellent info.

  • AAGK

    According to Westlaw, she is quite litigious as well. Poor Kim, she rented this place from a real nut.

  • JewelEyed

    Actually, it’s a public business lot for customers of that establishment. So…

  • Joe_D_Messina

    Sometimes lots/spaces are specifically posted as being just for particular businesses. Most are not and are just community lots shared by businesses. They can tow cars basically at their whim but going after people after the fact or doing anything to somebody encouraging others to use the lot would likely be fruitless.

    Technically maybe illegal but unless you had it documented that somebody was advancing themselves financially on the deal there’d be almost no chance of getting a prosecutor to take any action. They’d view it as a civil matter. And even in a civil trial you’d need to prove damages of some kind, hence you’d again almost need proof of the spaces being sold for a price to get anywhere.

  • wilcoxon

    I fail to understand how gag clauses are legal. If a business fails to deliver on the goods or service promised then anyone should have the right to tell anyone and everyone about their experience.

  • Becky Deloy McIntyre

    It says the reservation deposit is part of the total fee and is not refundable. What part of that isn’t clear?

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