New confidentiality clauses can influence vacation rental reviews

Look who's trying to doctor those online reviews! / Photo by I Scott-Flickr
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.”

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 that she may add non-disparagement language to her contract next year. But she also worries that the clause could make renters suspicious. “Renters may walk away from the deal, as they might feel that the owner is hiding something,” she says.

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 adds, “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 dust-up over non-disparagement clauses is focusing attention on the inherent problems of user-generated reviews. Online write-ups are difficult to verify and can be rigged by savvy online reputation-management operatives, who 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 that property managers sometimes slip non-disparagement clauses into their vacation rental agreements. But since VRBO only connects homeowners with renters, it doesn’t have the power to prevent them from doing so.

He recommends that rental customers 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 as a guest,” he says.

The Vacation Rental Managers Association, the trade organization for the vacation rental industry, also takes a dim view of rental agreements that prevent customers from reviewing a property. Steve Trover, the group’s president, said that 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 told me.

At its last convention, the association organized two sessions to help members make the most of guest-generated reviews. Trover says that online ratings and the recommendations of friends and family can help travelers “feel confident about their vacation rental stays.”

At the same time, it’s not hard to understand why a property manager would want to include a confidentiality clause. Renters may inadvertently reveal sensitive details about a property, such as lock combinations, safety problems, ways to get around homeowner association rules and even the property’s street address. Those, in turn, could make the rental unit vulnerable to theft.

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

“The notion that as a traveler you have to worry about being fined by your hotel or rental property if you did not enjoy your stay shows just how bad things have become in the world of online review sites,” says Travis Katz, the 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 you avoid being ensnared by a contract that limits your free speech? Read it carefully before you agree to a rental and before you pay for it. And if you see something you don’t like, move on.

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