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HUDSON, NY (CNBC) -- A hotel suddenly drowning in bad online reviews over a $500 fee for bad online reviews said Monday it was only joking.

"The policy regarding wedding fines was put on our site as a tongue-in-cheek response to a wedding many years ago. It was meant to be taken down long ago and certainly was never enforced," the Union Street Guest House said in an email to CNBC.

Earlier Monday morning, the hotel's website still displayed a policy highlighted in the New York Post: "If you have booked the Inn for a wedding or other type of event anywhere in the region and given us a deposit of any kind for guests to stay at USGH there will be a $500 fine that will be deducted from your deposit for every negative review of USGH placed on any internet site by anyone in your party and/or attending your wedding or event."

The Post story yielded dozens of one-star reviews on Yelp and one from an anonymous poster who wrote:"That's funny. Yelp doesn't publish real reviews I've gotten that are positive but they'll publish all these negative reviews from people that have never been to the establishment."

Located near the Catskill Mountains in Hudson, New York, the hotel was built in 1830 in the Greek Revival style and offers free Wi-Fi, flat-screen TVs and 500 thread-count sheets. Victoria Nelson, who runs the nearby Woodbine Inn and the Hudson Valley B&Bs hotline said that very rarely a guest will try to finagle a refund or discount by saying they'll post a bad review, but it's really up to the owner to run a shipshape operation to reduce that possibility.

"It's eye-opening and astounding and shows chutzpah that they would try to charge $500 for a non-disclosure," she said of the other hotel.

Even if the hotel wasn't joking, it may have had the desired effect.

"Legally it probably has the same effect as a no-smoking policy," said Gene Policinski, chief operating officer of the Newseum Institute and senior vice president of the First Amendment Center. "It's maybe more to do with intimidation than enforcement."

The policy doesn't fall under First Amendment laws because the inn is not operated by the government, so enforcement would likely fall under contract law as an agreement between the hotel owner and the customer, Policinski said.

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