http://www.yelp.com/biz/union-street-guest-house-hudson?sort... 10 negative Yelp reviews have been posted today (so far), ouch...
http://www.tripadvisor.com/Hotel_Review-g47931-d490934-Revie...
Their website navigation is a very discrete image map in the middle of the page, http://www.unionstreetguesthouse.com/ obviously this was someone's first website.
It's probably not legal, if it is then it is unenforceable in court, even if it was in their terms contract.
Here is the page with their $500 review fee policy: http://www.unionstreetguesthouse.com/events_weddings.shtml
I don't condone leaving negative reviews if you haven't stayed there, but if you do be sure to note that you have not stayed at the hotel and are just commenting on their policies to warn people, unless that is against the review sites policy, then don't do that.