The Internet and Social Media has become a very powerful
tool for people in determining where to eat, vacation, shop, purchase and
live. Many small businesses can be
permanently harmed by bad reviews posted on one of the many popular sites such
as Yelp!, Trip Advisor or Facebook.
These reviews can been seen by millions of consumers which is a
phenomenon that simply did not exist twenty years ago.
To combat the
effect of negative reviews, an apartment complex in Orlando included a Social
Media Addendum in their lease package for execution by new tenants. The Addendum’s preamble is reasonable,
stating that “unjustified and defamatory reviews…can cripple a business by
creating a false impression in the eyes of consumers.”
The Addendum
then sets forth a prohibition against any negative reviews, stating, “Applicant
will refrain from directly or indirectly publishing or airing negative
commentary regarding the Unit…” To
clarify its position, the Addendum states further that “Applicant shall not
post negative commentary or reviews on Yelp!, Apartment Ratings, Facebook, or
any other website or Internet-based publication or blog.” Instead of discouraging defamation through
reviews, the Landlord, in the Addendum, was attempting to stifle all negative
reviews by making it a breach of the lease if a negative review was posted,
even if factually accurate. Even the
determination of what was a negative review was subjective, making the Landlord
the sole arbiter of negativity, “Owner shall make the determination of whether
such commentary is harmful in Owner's sole discretion.”
In most lease
contexts, a breach of a lease term provides the party with the right to
terminate the lease and possibly actual damages incurred as a result of the
breach. Instead, the Social Media
Addendum provides for a liquidated damages clause upon posting of any negative
review of “$10,000.00 for the first such breach, and an additional $5,000.00
for each subsequent breach…owed to Owner within ten (10) business days of the
breach.” To add pressure, if a roommate
writes the negative review, the liability extends to all tenants, as the
Addendum provides that “the Applicants shall be jointly and severally liable to
pay Owner liquidated damages…”
Finally, the
Landlord attempted to claim ownership of “any and all rights, including all
rights of copyright as set forth in the United States Copyright Act, in any and
all written or photographic works regarding the Owner, the Unit, the property,
or the apartments.” This is clearly an
overreach and unlikely to be enforceable. The purpose of this claim is to be
able to indicate to any website owner who is hosting written documents,
pictures, or videos of the apartment complex that the landlord owns all copyright
in the works and has the legal right to have such works removed from any
website. Many websites, regardless of whether this provision is enforceable,
would likely act and remove such items to avoid future claims.
After the
addendum became known to the public, the apartment complex stated that it would
no longer use the addendum and that it would not attempt to enforce same
against its current tenants. While the goals of the apartment complex were
misplaced, there are things a landlord can do to at least protect themselves
from certain actions taken by tenants with regard to social media.
First, a
landlord can agree with the tenant to make the terms and conditions of their
lease confidential. The main reason for this is to prevent others from knowing
the specifics of any lease transaction which may affect negotiations for other
units with in an apartment complex.
Second,
landlords can enforce, against any tenant or third-party, defamatory or
libelous statements which are not based on fact. While truth is usually a
strong defense to any online social media posting, subjective opinion or
outright falsehoods can be actionable, resulting in a claim against the tenant
should a court determine that the facts are false contained in any such online
posting or that the opinions go far beyond the underlying facts such that the
intent is not to explain the facts but to harm or punish the landlord.
Third, while
probably not fully enforceable, landlords should always seek a mechanism to
resolve issues and disputes prior to a tenant making online postings which
could damage the ability of the landlord to lease in the future. For example, a
clause could be added to a lease that states, “Tenant agrees, before posting
any negative reviews, pictures or information on any website or social media
site about the landlord or the premises, to give the landlord ten days’ written
notice of the underlying issues and if the landlord timely corrects the issue,
tenant agrees not to post or disclose the negative matter on any website or
social media site.” Such clause would
not prevent a subsequent posting by a tenant, but may discourage such action,
especially if landlords are proactive in addressing tenant concerns.
Finally,
rewarding positive reviews is always permissible and should be encouraged by
landlords. For example, landlords can
give discount coupons to tenants who post positive reviews on applicable social
media websites. The tenants should be encouraged to give honest and factual
opinions as part of any such program. Encouraging positive reviews and
addressing negative issues before they lead to negative reviews is always the
best weapon a landlord can have in promoting social media growth of their
leased premises project to the world.
Michael J Posner,
Esq., is a partner in Ward Damon a mid-sized real estate and business oriented
law firm serving all of South Florida, with offices in Palm Beach County. They specialize in real estate and business
law, and can assist landlord and tenants in leasing, evictions and negative
reviews. They can be reached at
561.594.1452 or by e-mail at mjposner@warddamon.com
