This Arizona renter says he was fined a stunning $4,000 for leaving negative reviews about property — but is that even legal?

A nightmare rental experience turns into a financial fight

Paull and his wife sold their home in North Scottsdale in 2023 and signed a lease at a nearby condo managed by Denali Real Estate. They moved quickly, hoping to give themselves a comfortable cushion of time before their official move-out date.

But things went south fast.

“When we lifted a piece of furniture in the master bedroom, there was an enormous patch of black mold,” Paull said. The couple left immediately and asked Denali to fix the issue.

When they returned, Paull claims the problems weren’t resolved: walls still had holes, sections of carpet were missing, and sharp carpet tacks were exposed on the floor. Fed up with what he described as unresponsiveness from the company, Paull turned to Google and Yelp to share his experience.

Instead of a response, he says his $2,200 rental credit suddenly flipped to a $1,800 balance due. The reason? Two $2,000 “non-disparagement” penalties.

Their lease prohibited “negative online reviews, negative ratings of 3 out of 5 stars or less and negative posts on all social media and review platforms.” Violating this clause, it warned, would trigger a $2,000 fine per occurrence.

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Why that clause is likely illegal

The CRFA makes it illegal for companies to enforce contract clauses that punish consumers for honest reviews, whether online or offline. That means if you post a truthful review, a company cannot legally fine, threaten or retaliate against you for it, even if it’s negative.

The Federal Trade Commission (FTC) has brought enforcement actions against businesses that try to use “gag clauses” in contracts. Violators may face civil penalties and court orders. If you’re a renter or customer, that means:

• You cannot be fined or penalized for a review just because it’s negative.
• You can file complaints with the FTC, your state’s attorney general, and the Better Business Bureau (BBB).
• You should save any documentation — contracts, emails or invoices — if you plan to dispute the charge.

As of publication, Paull has filed complaints with the Arizona Attorney General’s Office, BBB, and says he plans to contact the FTC.

Denali Real Estate backs down, but the damage may be done

After 12News reached out for comment, Denali Real Estate issued a statement saying it takes “all feedback seriously” and submitted its lease agreement for legal review. A few hours later, the company said it would remove the non-disparagement clause from its contracts “immediately.”

Still, it remains unclear whether Denali will drop the charges against Paull.

The company claims it made multiple attempts to fix issues at the condo, but says Paull repeatedly denied access to contractors and repair teams. Paull disputes that version of events — and says the property remains uninhabitable, with storm damage and even animal feces present inside the unit.

Whatever the outcome, one thing is clear: what happened to Paull is part of a broader issue facing renters, and consumers in general.

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What to do if a company tries to silence your review

If you’re ever threatened with legal or financial consequences for leaving a review, here are the steps you can take:

• Know your rights: The Consumer Review Fairness Act makes it illegal for businesses to enforce “gag clauses” in consumer contracts. If your lease or service agreement contains one, it’s unenforceable, even if you signed it.
• File complaints with the right agencies: Start with your state’s attorney general. You can also contact the FTC and the Better Business Bureau:
  • FTC Complaint Assistant (https://reportfraud.ftc.gov/)
  • Arizona AG Consumer Complaints (https://www.azag.gov/complaints/consumer)
  • BBB File a Complaint (https://www.bbb.org/file-a-complaint)
• Save all documentation: Keep copies of the lease, emails, and any charges or correspondence tied to the dispute. You’ll need them if you decide to pursue legal action or dispute charges with a credit card company or bank.
• Don’t be afraid to speak up: Reviews are protected speech. If a company uses intimidation tactics to bury honest feedback, they may be the ones violating the law, not you.