Total new home and condo sales to the end of November this year were 16 per cent below the long-term average across the GTA. But the biggest decline — some 38 per cent — has been in the sale of detached, semi-detached and townhouses, according to a report released Wednesday by market research firm RealNet Canada.

Condo sales were down just seven per cent over historic averages for November — although they fell a whopping 59 per cent compared to the same month in 2011, the tail end of what was record year of 28,000 new condo sales across the GTA.

Three new condo launches in particular buoyed highrise sales numbers this November, says RealNet, led by Tridel’s Ten York project in the waterfront area, which is considered an important bellwether of the softening market. Some 85 per cent — 596 of 694 — of its preconstruction units put up for sale Nov. 3 sold within the month, says Tridel vice president Jim Ritchie.

The RealNet study provides some of the best evidence yet of the growing gap between what’s become, just since 2011, the tale of two housing markets across the GTA — new condos and new low-rise homes, which includes detached, semi-detached and townhouses.

The average price of low-rise homes hit a record $625,473 in November, while new condos averaged $437,264, says RealNet.

While the gap between houses and condos has traditionally averaged about $78,000, it has soared to $188,000, largely just in the last 18 months, says George Carras, president of RealNet, which provides new housing market analysis for the Building Industry and Land Development Association (BILD.)

“Sales of low-rise homes in November were the worst on record next to the gloom of November 2008, when we weren’t sure if the world’s financial system was going to hold together or not,” says Carras, citing scarcity for the fact that prices soared to the point that they, combined with tighter mortgage rules, pushed down sales in November.

The scarcity includes a shortage of develop-ready land for new subdivisions caused by a lack of municipal roads, sewers and other infrastructure, as well as the fact that thousands of hectacres of future-growth areas within the provincial greenbelt are tied up in disputes at the Ontario Municipal Board, says Carras.

That supply pressure, at the same time the GTA is seeing a “mini baby boom” among echo boomers, could push up new home prices an average 15 per cent a year, says Bryan Tuckey, president and CEO of BILD.

“In Vancouver, the gap has grown to $700,000 between a condo and a detached house. Vancouver is about 15 years ahead of Toronto in terms of the maturity of its intensification policies and their impacts,” says Carras.

“That city is between the water and the mountains. Here we’re between the water and policy mountains and the same impact is starting to show.”

But John Stillich, former executive director of the Sustainable Urban Development Association, says too many developers remain fixated on the two extremes of new housing — high- and low-rise — instead of a new middle ground of two- or three-storey housing types that allows GTA residents to “live sustainably on the lands that we do have.”

“It’s not about a scarcity of land. It’s about how you use the land. The development industry could probably build twice as many ground-related houses if they started thinking in a completely different way.”

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Here they are:

Is there a buyer’s remorse period in Ontario?

If you are buying a new condominium from a builder, you have 10 days to change your mind. You do not need a reason. This does not apply if you buy a new house from a builder and does not apply if you are buying a resale home or condominium. Why condos only? The clause is included in the Condominium Act.

Can a buyer sign an offer and then walk away?

The Ontario real estate contract gives a buyer 24 hours to pay the deposit, once the offer is accepted by the seller. The buyer cannot just change their mind or they can be sued.

For example, the buyer offers $300,000 for a house which is accepted. The buyer changes his mind and doesn’t pay the deposit and walks away from the deal. The seller resells the property for $275,000. They can still sue the first buyer for the difference, or $25,000.

Can buyers use conditional clauses as escape hatches?

Most real estate contracts are conditional on the buyer being able to get a mortgage and being satisfied with a home inspection. Other conditions include being satisfied with a condominium status certificate when buying a resale condo.

Many buyers think these conditions give them the right to just change their minds. It is not that easy. The case law has demonstrated that buyers must try and satisfy any condition in good faith. This means that you need a legitimate reason why you found the home inspection report or condominium status certificate unsatisfactory.

Who gets the deposit when buyers change their mind?

In most cases, the deposit is held by the seller’s real estate brokerage, in trust. Under the law, when a deal breaks down, the brokerage cannot pay the deposit to anyone without either a mutual release or direction signed by both the buyer and the seller, or an order of the court. As such, when deals do not close, if there is no agreement, the deposit can be locked up for a long time, and the buyer will not have access to it to make an offer on another property.

Is there a “legal” way for a buyer to get out of a deal?

It depends. If for example, there was a right on your title for the City to access 20 per cent of your property for any reason, known as an easement, and that was not disclosed to the buyer, they can usually cancel the agreement without penalty. However, there have been other cases that indicate if there is a problem with a city work order or title problem for which the seller can obtain title insurance to protect the buyer, then the buyer cannot refuse to close. A buyer can also cancel if there has been substantial damage to the property before closing, such as a flood that was not repaired. You can’t refuse to close if the oven is not working.

The better answer in all of these situations is to be very careful and serious before you make any decision to buy a home. Changing your mind later can be very expensive.

More Mark Weisleder columns

Mark Weisleder is a Toronto real estate lawyer. Contact him at mark@markweisleder.com

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If the real estate market is headed for a correction, then it presents a historic opportunity for buyers of investment properties. The main reason is that interest rates should continue to remain at historic low levels, even as prices fall. The key thing to remember is that the property must have positive cash flow.

What I mean by positive cash flow is that after you make your down payment, the income you receive from tenants is more than what it costs for your mortgage payment, property taxes, maintenance and utilities (if not paid by your tenants). Budget an additional 10 per cent for unanticipated repairs, as these always come up.

If you’re going to take a dip into commercial real estate, make sure, you must have the right team of people working with you. Who do you need? Here are some suggestions:

The right real estate agent: You want to find a real estate agent who specializes in this area and preferably owns investment properties themselves. They can introduce you to their contacts, such as insurance brokers, home inspectors, mortgage brokers and property managers, to protect you when making this investment.

A knowledgeable mortgage broker: You need someone who understands your personal financial situation in advance so that you are aware as to how much you can afford on any mortgage needed to finance any property.

A home inspector: You want a firm that specializes in the type of property that you are interested in. Ask for references and check them out. You need to have an unbiased opinion as to how much you may have to invest in the property itself after taking ownership.

An experienced lawyer: Depending on the type of property, you may need special clauses to protect you regarding verification of income, tenants or even the condition of the property. You will also need advice as to whether to hold title to the property in your own personal name, a partnership or a limited company.

An accountant: Besides tax advice, if there are commercial tenants involved, then you will need to be registered for HST purposes.

Private planner: If you are considering any changes to the property, whether it is an addition, basement apartment, to bring in more income, you need to know before you buy as to whether this is permitted under the local zoning by-laws and what applications may be necessary to get this done.

A building contractor: Renovations to improve your cash flow require someone experienced who can bring any project in on budget. Make sure that you check references and that a proper building permit is applied for in advance on any job. Put everything in writing so that there are no arguments later.

An arborist: Sometimes there are trees on the property that will have to be removed in order to do the renovations that are needed. There are many restrictive tree by-laws out there that may prevent taking down a tree. A lot depends on the diameter of the trunk of the tree. You need an experienced arborist who can advise you in advance how difficult it may be to remove any tree from the property.

A local property manager: You do not want phone calls in the middle of the night to fix something on the property. You need to hire an experienced manager with local ties to where the property is to make sure that your investment is well cared for and that all tenants are properly qualified in advance. Again, ask for references and check them out. Budget approximately an additional 10 per cent of your total expenses to pay for the manager.

By having the right team assembled, you can do the homework you need to do in advance of making such an important investment decision.

Mark Weisleder is a Toronto real estate lawyer. Contact him at mark@markweisleder.com

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When there is confusion about what fixtures are to remain in a home after closing, it often ends up in court. The lesson is to be careful and clear when you write up your contract so you don’t have to sue later.

In 2009, Mark and Denise Holland bought a house on Sherwood Road in Ajax. The listing said a “built-in” bookcase in the recreation room was included. This bookcase was 19 feet long and 7 feet high.

The couple’s offer said that all “built-in cupboards” and permanent fixtures were included in the price, but when they moved in, the bookcase was gone. The sellers said it was a mistake that it had been included in the listing and since the bookcase was not attached to the wall, it was not a fixture.

The agent admitted that the bookcase was mentioned in the listing by mistake. The buyers complained to the Real Estate Council of Ontario. The council ruled that the error was made by the listing agent, and that the sellers were not properly protected and the buyers were misled by the false advertising. However, the council does not award damages, so the buyers had to sue in small claims court for the cost of the bookcase.

In court, the seller’s daughter testified she was present when the buyers toured the property and were told explicitly that the basement bookcase did not go with the house. The buyers admitted they did not closely examine the bookcase to see whether it was attached to the wall. In a decision on September 2, 2011, Justice Albert Cooper accepted the daughter’s evidence and noted that the buyers offered no evidence to contradict her story. He ruled that the buyers were not entitled to the bookcase.

I had a situation where the offer said “built-in microwave.” The microwave was not built-in so the sellers took it with them. The buyer complained after closing. When I asked the sellers whether there was another microwave in the kitchen, they said no. So I asked them, what did you think the words built-in microwave meant? They could not answer and eventually agreed to give back the microwave.

Related: They walked from house deal and were sued

When you are buying any home, you can never get too detailed about what you expect to be included. Ordinarily, the rule is that if it is attached to the house, it is a fixture and it stays with the house. If it is not attached, then it is considered a chattel, and it doesn’t stay with the house unless the buyer includes it in the contract.

Try to avoid general statements such as “built-in.” They may not be built in after all and may only be attached by a hook or other device that can be easily removed. Instead, be careful to list the make and model number of all appliances, and also note the colour and location of any drapes, carpeting, closet organizers, cabinets, bookcases, mirrors, pool equipment, satellite dishes, barbecues, sheds, garage door openers and anything else that you expect to be on the property after you move in.

Take pictures of the items during your home inspection so that you have proof in case the seller tries to replace anything with cheaper items.

By being careful and clear when you write your contract, you can avoid aggravation after closing.

More Mark Weisleder real estate columns

Mark Weisleder is a Toronto real estate lawyer. Contact him at mark@markweisleder.com

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