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Suppose I hire some homeless people to stand in a specific neighborhood. Housing prices drop. I then buy a house cheaply. What can I be sued for?

The best idea I had is that if I had them target a specific house being sold, and one of them committed a misdemeanor, then a plaintiff could argue that they should be found to be my employees and that they were furthering a business purpose in committing the misdemeanor, and I be found under vicarious liability.

Even with that idea, still sounds like a good way to buy some cheap housing.

There are many variants:

  • What if I had no business motive; I just wanted to de-gentrify the neighborhood at no personal gain?
  • What if I give them a broader direction, e.g.: giving them a bunch of food and a bus ticket to Denver, and no further instructions.
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  • If you hired them, they are your employees, unless somehow you contract them as independent service providers.
    – user4657
    Jul 16, 2020 at 9:22
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    Is the kid I hire to mow my lawn an employee? What if he uses his own lawn-mower? I understood that a major aspect of the employee/contractor test is whether the person uses their own resources to do the job. Either way, far from obvious to me that they're employees.
    – Richard Turner
    Jul 16, 2020 at 17:04
  • @RichardTurner Whether or not they are your employees is not so much important as the fact that you are paying them to do something. If that something is tortious, then you would likely be liable as either a co-conspirator or as respondent superior.
    – IllusiveBrian
    Jul 16, 2020 at 18:07
  • @IllusiveBrian I guess I should explain my thought process more. I can split the original question into (1) is this conduct inherently tortious, and (2) what are the legal risks of doing so which are not guaranteed? For (2), I had posited the scenario where one of the homeless people e.g.: does graffiti, despite lack of instruction to do so. As you point out, for (1), the employee/contractor question doesn't matter. For (2), it does: no vicarious liability for contractors. legalmatch.com/law-library/article/…
    – Richard Turner
    Jul 16, 2020 at 18:19

2 Answers 2

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This is an interesting hypothetical. Depending on exactly what happens, you could be committing one of two torts, fraud or nuisance.

Fraud: If your stunt causes homeowners to panic and sell to you at a lower price because they fear the homeless are moving into their neighborhood, you have committed fraud. This is fraud because you have a) misrepresented the truth; b) the homeowner believed your misrepresentation; and, c) she was harmed by acting on your misrepresentation.

Nuisance: If, however, your stunt causes other buyers to panic, and make lower offers, you have committed the tort of nuisance. This is not fraud, since the homeowner did not lose because she believed your stunt, but because others believed your stunt. This is a nuisance because your stunt imposed real and substantial loses on the homeowner, with no off-setting legitimate benefits to you.

Note: You can commit nuisance, even if you do not personally profit from your stunt.

Interestingly, your scheme is almost the reverse of classic blockbusting of the 1950s and 1960s. Blockbusting real estate agents would get white homeowners to sell to them at low prices by telling them blacks were moving into the neighborhood. They would then turn around and sell the houses to blacks for higher prices.

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Don’t worry about the tort; worry about the crime

This is fraud: “intentional deception to secure unfair or unlawful gain.”

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    This answer would benefit from elaboration. What is the deception? What is the unlawful gain? Has any court ever recognized this behavior as fraud?
    – bdb484
    Jul 17, 2020 at 4:29

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