For anyone looking for a place to stay – whether a hotel or an apartment complex – there is no question that, second to price, peer reviews are very important.   Hotels and apartment complexes are well aware of this too and, naturally, their owners and members of management are concerned with negative reviews – in particular false and defamatory reviews.

This was on display in August 2014, when an upstate New York hotel was blasted after a policy threatening fines of $500 for bad reviews went viral.  Now, a Central Florida apartment complex has one-upped the Union Street Guest House of Hudson, N.Y. by threatening tenants with $10,000 fines for bad reviews, as reported by Ars Technica.

According to the Windermere Cay’s Social Media Addendum (“Addendum”), the Winter Garden, Fla., apartment complex also calls for the assignment and transfer of copyright interests in “any and all written or photographic works regarding the Owner, the Unit, the property, or the apartments” by applicants signing the document.  This, of course, is a whole separate issue that could warrant its own article.

Legal enforceability vs. risks of reputational harm

The beginning of the Windermere Cay’s Addendum reads as follows:

There is a growing trend… where tenants will post unjustified and defamatory reviews regarding an apartment complex in an attempt to negotiate lower rent payments, or otherwise seek concessions from a landlord. Such postings can cripple a business by creating a false impression in the eyes of consumers. The damages resulting from this false impression can include potentially millions of dollars in economic losses, and have permanent consequences that can unjustly destroy a business.

The concerns with negative reviews are justified; such a policy, probably not.

Indeed, this Addendum is likely unenforceable.  But even if its provisions were enforceable, the PR backlash of such a contract is just not worth it.  Businesses including apartment complexes not only need to factor in whether there is a legal basis for each of their policies, but also must weigh the potential reputational risks.

As noted in our post about the Union Street Guest House, the New York hotel had a modest number of Yelp and Google reviews through Aug. 3, 2013.  Overall, those reviews were rather favorable too. But after the story of the $500 fines to wedding parties went viral on Aug. 4, the hotel’s Yelp page was flooded with hundreds of 1-star reviews.

While most of these reviews have since been removed, the Union Street Guest House’s Yelp page still shows 50 reviews with an average 1.6/5.0 star rating; just as bad, most of the top search results on Google are news stories about the hotel threatening guests for writing negative reviews.

Windermere Cay, located no more than a mile from Walt Disney World, has suffered a similar fate.

According to Ars Technica, Windermere Cay’s Yelp page had previously had just two reviews last week – both of which had actually been filtered from the main page.  Then, after the Addendum went viral, the Yelp page accumulated more than 100 new negative reviews.  As of late afternoon on March 13, through our own search, that number was down to 18, yet it still boasted a 1.0 star rating.

A similar thing happened, albeit to a lesser extent, with the Windermere Cay’s page on ApartmentRatings.com.

Damage done, lesson learned

If it was bad publicity that the Windermere Cay was afraid of, it received that and more.  According to various media reports, the Windermere Cay’s  property group said the Addendum was from “a previous general partner” for the complex, and that it did not approve of this part of the leases.

While that may be true, the damage has been done.

Many businesses may attempt to fine their consumers or prohibit them from publishing negative content and, on some occasions, certain provisions could be legally supportable in some jurisdictions.  Even so, the potential negative reputational impact is not worth it.

In this day and age, the moment someone feels bullied by a business or organization, they are likely to either go to the media or post about it online themselves (which could, in fact, get picked up by the media).

If a business is thriving and treating its customers well in the process, a few negative reviews will not be that impactful, so long as there is enough good to outweigh the bad.  In other words, business should be more concerned with legally generating and monitoring their online reviews than attempting to silence critics – in particular with large fines.

That being said, handling online reviews is admittedly a difficult process. Nevertheless, all businesses must avoid trying to silence customers from potentially disparaging them online, especially by slipping monetary fines into their contracts. Clearly, it will only make matters worse.