There are a lot of advantages to choosing a vacation rental home over a hotel, resort, or other short-term travel accommodation. Renting a vacation home can be a great option for groups or families looking to get away and spend quality time together in a more spacious, private, and homelike environment than a commercial hotel. Online vacation rental marketplaces like VRBO, HomeAway, FlipKey, and Airbnb have capitalized on the merits their properties offer to travelers looking for more isolated vacation alternatives amid pandemic-era concerns.
Most vacation property renters instinctively trust that they will be safe on the premises, and that problems will be handled professionally, lawfully, and equitably by the company in the event that something goes wrong. But analyses of the terms and conditions issued by big-name vacation rental companies reveal some blatantly anti-consumer conditions. And it cannot be said that these kinds of conditions are standard for all travelers—these unreasonable clauses are ones that hotels simply don’t impose.
Before you rent a home away from home, take some time to understand your rights, and the ways they are limited by unscrupulous companies eager to insulate themselves from legal action against their own negligence.
The Binding Arbitration Clause
Let’s take VRBO’s Terms and Conditions document as an example. This densely-worded manuscript contains the line: “Any and all Claims will be resolved by binding arbitration, rather than in court.” Although easy to miss, this line has enormous implications.
This means that when you sign a short-term rental agreement with the company, you give up your right to take the company to court with a traditional personal injury lawsuit. If you are injured by the company’s negligence, you cannot bring a civil lawsuit against the company. Instead, your claim will be handled through a process called arbitration. There is no judge or jury in arbitration. Rather, the dispute will be settled outside of a court by a designated person (an arbitrator) who renders what is termed an “arbitration award.”
A civil lawsuit, the court-based process through which an injured person can seek to hold another party liable for harmful or wrongful actions, is a fundamental right afforded by the law. This legal structure exists so that people who are injured through another’s fault can obtain compensation for the damages they sustained. But by signing this vacation home rental agreement mandatory for renters, that right is surrendered.
To get a better understanding of what this would actually look like for the average vacation property renter, let’s imagine a realistic scenario. A family rents a vacation home and decides to have an evening barbeque on the property’s attached deck. But due to poor maintenance, the structure breaks, injuring all those on the deck at the time of collapse. Under normal circumstances, the harmed party could file a personal injury claim against the company that failed to uphold its duty to provide a safe environment for guests.
However, under the vacation rental company’s terms, the injured family does not have the option to take the company to court to receive compensation to cover their medical bills and other damages. The family’s only option is to settle the dispute through arbitration, on the terms of the vacation rental company.
When opposing a large, heavily-funded company, settling a dispute through arbitration can be unfavorable to the injured consumer in several ways. Firstly, an arbitration award is binding and very difficult if not impossible to appeal, even if the arbitrator makes a mistaken or wrong decision. Secondly, the company often has control over the process of choosing an arbitrator, and the decision may not be an objective one. Thirdly, because arbitration hearings are privately conducted, without the public transparency of a courtroom, there may be more chance for biases and decisions which heavily favor one side over another. Many arbitration clauses are strongly in favor of the company over the customer, and the injured party is not protected by a court charged with defending justice.
The Individual Claims Cause
Even beyond limiting the legal action injured parties can take, renter agreement documents also hide carefully-worded language which further prevents any group claims. For example: “Any and all proceedings to resolve Claims will be conducted only on an individual basis and not in a class, consolidated or representative action.” This goes into complicated legal territory, but it is another way for the company to protect itself by making action against it as difficult as possible.
We can take the same aforementioned deck collapse example to examine how this clause would affect an injured group of people. Let’s imagine that five family members were injured in this deck accident. Instead of filing a claim together as a group, each individual person must file a separate claim. This drives up the cost of justice when multiple people are injured as a result of the same act of negligence.
A group claim can look worse than an individual claim for the company, as it shows that multiple people were hurt due to the same reason—and that is one reason why the clause protects the company from class actions. There are other ways this clause helps the company and hurts the customer. For example, while a class action will ensure that all injured parties receive compensation, individual actions do not guarantee this, and the company could end up saving a significant amount of money. In short, companies work very hard to aggressively defend themselves in these agreements. Some even go to the extreme of stipulating that if for any reason a claim proceeds in court rather than in arbitration, the customer must waive any right to a jury trial.
The Devil in the Details
Multiple research studies and social experiments have found that as little as between 10% and 1% of the U.S. population actually reads the fine print when purchasing a product or signing up for a service. It’s become common practice to briefly skim the legal fine print before signing a name to the conditions. And companies have been quick to take advantage of this fact by burying anti-customer clauses in thickets of legalese.
But it’s not just consumer laziness that is to blame. Long, miniaturized, and tightly-packed pages of text, in addition to mobile screen interfaces that are deliberately difficult to navigate, make use of the knowledge that most customers are reading these documents on their phones. Vocabulary that the average layperson won’t be familiar with is intentionally chosen to mislead and confuse. Companies do all they can to make it nearly impossible for the average consumer to understand what they’re putting their name to.
The law office of Shrager, Sachs, & Blanco is available to answer any questions you may have concerning vacation home rental terms and conditions agreements. Call our firm if you have been impacted by a situation similar to what we have discussed in this article—we may be able to help.