Greg Dent: Welcome to the True North Compliance Podcast. My name is Greg Dent. I want to launch into what it is we're doing here. I think that's an important question that people are probably going to want the answer to. But let's start with a bit of an introduction as to who we are and maybe why we decided to do this. So, Shawn, who are you?

Shawn O’Hara: Well, I'm Shawn O'Hara. I consider myself a marketer. I've been doing web stuff since the very beginning, 1995. Through a varied career, different companies and so on, I started dealing with property listings and REALTORS® and real estate agents in late 95 and was working with a group of people and actually bought their company. They wanted to go on to do other things. They were doing almost strictly real estate. They helped to have the first house in Victoria that was sold strictly online. It was at the time a multi-million dollar listing that David Ellis was actually the REALTOR®. We had done a nice feature up for him and the property sold.

Greg Dent: Nice. Back to when the Internet was almost dial-up still at that point. So yeah, it was dial-up. That was about 1996, I think that happened 95, 96, maybe early 97.

Shawn O’Hara: Then in 1997, I bought that business and was running it out of my home, met up with two people who were working in one of the local real estate offices here in Victoria. One of them, Roger Whitson, was a former REALTOR®, and then got involved in listings data in 1993. He has a ton of knowledge about listings and data and spread on into programming and so on. In 2001, we set up Radar Hill, a web design company. Over the years, we've gone from dealing with individual real estate agents to agencies and we've built the back end of the Victoria Real Estate Board and there are strata docs and some other real estate tools over the years, some of which no longer exist and some that are people are using in various capacities.

Greg Dent: Yeah. I think some of our listeners will probably be interested to hear more about strata docs at some point, because that remains an unsolved issue for many REALTORS® in many places. Yet, the Victoria board, thanks to your group's work on that, is kind of light years ahead. From my understanding, it's a much simpler process. So we'll talk about that at some point, I certainly hope.

Shawn O’Hara: Yeah. That would be a great topic. All right. Great. Do you want to tell me about yourself?

Greg Dent: Yeah. My background is kind of almost the exact different path to get to where we are today. I started as an agent 13 and a half years ago. It was a transition out of the not-for-profit sector. I used to manage summer camps and childcare facilities. A whole different world. My degree is in recreation management, and I'm very happy with that degree, but I sometimes like to joke that I have a degree in canoeing, so I'm better at canoeing than anyone I know. That's not true even unfortunately, but anyhow, point is, became an agent 13 years ago and I've really enjoyed that job and I continue to do that today. About five and a half years ago, I developed an interest in helping agents with some of their technological needs. To put a really fine point to it, it's something that I've always kind of dabbled with, but five and a half years ago, we lost control of the real estate council here in BC. The result of that was a bunch of new forms that we were not used to in our practice. When I looked at those, I thought there was a real need to make that better for agents primarily. What I'm actually talking about right now is the inception of ReallyTrusted. The other half of what I do right now is I run a company called ReallyTrusted. That insight and the work involved in that led me down a path where I've spent a lot of time solving compliance issues for agents and for brokerages, primarily from an anti-money laundering and terrorist financing perspective. That's where a lot of my time is spent now, under the FINTRAC rules and regs. We've dabbled in some other stuff and I think we'll continue to dabble in some other stuff as well. My background is very much the day-to-day experience, the lived experience of a real estate agent. Then I've morphed that into this more geeky area of where compliance intersects with the life of a real estate agent and how my focus really has been in making that compliance easier, better, making sure that we're doing it properly, but also making it so it's not quite as onerous a burden on the professionals responsible for it. So that's my background. How did you get interested in compliance, Shawn? I'd be interested to hear about that because from website and marketing is still a bit of a jump to compliance.

Shawn O’Hara: Yeah, it is a bit of a jump. I met a mutual contact, friend now, Dan Bennett way back when we were doing the trade show circuit. We had a product that put real estate listings on, I wouldn't even call them smartphones, it actually predates smartphones. Then when we started to go wireless...

Greg Dent: Talking about the flip phones?

Shawn O’Hara: Well, actually it was PalmPilots. Oh, PalmPilots for crews. They also called them PDAs, I think? Personal Digital Assistants.

Greg Dent: I had a PalmPilot in university and I diligently used it for my to-do list. I think I was probably the only one. That's awesome.

Shawn O’Hara: Yeah. So the first version and our business partner, Roger, would say that our third business partner got annoyed at him when he spent all our company money to buy a PalmPilot. Anyway, he went ahead and developed this and it was by synchronization where you basically plug this into the computer and it's synchronized and FTP'd in. We actually had instructions. Our REALTORS® would have to use an FTP program to upload. Eventually, this progressed to being wireless. We started serving other real estate boards and I started doing the trade show circuit. I went to the Western Conference, the real estate Western Conference in Banff, went to the Edmonton trade shows, Calgary and Vancouver, and the Fraser Valley ones. Somewhere in there, I met Dan Bennett, who had a company called Realty Nuance and who will be a future guest in this podcast. We stayed in touch. I don't recall exactly which trade show it was, but we would always run into each other and just got to know each other. When I was in his neighborhood, I would go and visit him. We just got to know each other more and more and worked on some projects together. About a year ago, he came to us and said that there's everything going on with compliance and it's becoming quite onerous for REALTORS® and for brokers and the fines are quite an issue. He noticed that the busiest person in a real estate office tended to be the compliance officer. Even though they have the forms, they have the process, they have ReallyTrusted, they have all of these tools, the compliance officer is still the busiest. They have to be available 24/7, some of them talk about having to be out and doing tasks on their smartphones. One of them told us she goes home at the end of the day, pours herself a glass of wine, sits in front of the computer, and reviews real estate contracts. What they're also running into was an issue of keeping track of all of these documents for when audits happen. He had an idea for a product that would address and keep a strong document trail. I could say a paper trail, but not as much as those on paper anymore. A document trail for everything involved in compliance and in an audit. So that when the auditors come knocking, they can prove that not only that they were compliant, but when they did everything that they were supposed to do. This was an interesting discussion and we started working on it and I wanted to find out much more about the issues. So I started talking with other brokers, other agents, and then going on websites and following the news and reading and find that it's becoming very interesting, I guess. I won't call it an obsession because it's not at that level, but it's got huge implications. In talking with other people, even outside of BC, it seems that the BC real estate industry or market is the most heavily regulated in North America. We could probably say in the world, because in this province, we have both the BCFSA, the British Columbia Financial Services Authority, and FINTRAC and the acronym escapes me, so I'm not going to look it up right now. That's federal and FINTRAC is dealing with money laundering and anti-terrorism. That's where you saw the opportunity.

Greg Dent: Yeah. The Financial Transactions and Reports Analysis Centre of Canada, by the way. There's so much to talk about in all of what you've just said. I think the regulatory burden is something that I spend an awful lot of time talking with an awful lot of people about because you're absolutely right that the regulatory burden really feels like it's increasing and whether it is or isn't is something we're going to explore with most of our guests I suspect. Because I think whether it is or isn't increasing is part of the question. The question becomes how important is that regulatory burden? Whether we're delivering a better product for consumers at the end of the day or not is actually what I think should be the measure of whether we're heading in the right or the wrong direction. We're no longer able to, to take an example, dual agency is no longer allowed in the province of BC. Is that a good thing or a bad thing? I think you'd find some real estate agents still at this point, who would think that it's not a good thing, then I would take the position that it's actually a terrific thing. If you look at the issues that it's solved for consumers, it is a tremendously better experience. The consumers are much more protected just to take one example, but that's an example of regulatory burden where many in the industry were very opposed to that change when it happened here locally five years ago. Where I think the regulatory burden was good, was right. I think the longer we've had this change in place, the more and more I think people agree with that sentiment that it probably was the right thing. It's really an interesting balance, I think, of burden and benefit and weighing that all out is certainly an interesting part of the puzzle in my mind, as to how our industry and every industry, in fact, as we think about compliance, more generally, how every industry deals with the lines, hopefully you understand kind of what generally we'll be talking about. If the name of the podcast wasn't clear enough, compliance. So if you're looking for Disneyland trips, this probably won't be the podcast that interests you. Now, if you're wanting to think and talk and hear about other people's opinions on compliance, I'm really excited about that.

Shawn O’Hara: Yeah, in my informal conversations, a lot with brokers, I've also been asking, how did we get here and heard various things. Some of the people I spoke with, I'd like to bring in on as guests on this podcast as well.

Greg Dent: Yeah. What other guests do we have lined up?

Shawn O’Hara: Well, our first guest will be Dan Bennett.

Greg Dent: I should jump in to say Dan's actually the reason you and I know each other. Dan has a tremendous ability as do many successful real estate agents of connecting people. That's kind of who Dan is at nature. I've known Dan for probably five years now. Since I've started working on ReallyTrusted, he was one of our early-ish customers, and I've kept in touch with him over the years. He saw an opportunity to connect us probably nine months ago or something, which is ultimately how we end up doing this podcast together. So Dan, Dan Renner, that's awesome.

Shawn O’Hara: That's right. He brought us together in Vancouver for a meal. Exactly. Good meet and talk.

Greg Dent: Exactly. What other guests do we have lined up?

Shawn O’Hara: We have Helen Jones from Jones Co Realty here in Victoria. She has been a REALTOR® since about the 1970s, so a ton of experience. It'll be fascinating to talk with her.

Greg Dent: That'll be interesting to be able to go back to an era pre even PalmPilots when MLS listings were in a little or not so little blue book, and explore how the industry has changed over a long enough period of time to be attractive, I think.

Shawn O’Hara: Even almost pre-MLS too.

Greg Dent: Well, pre-digital MLS anyway.

Shawn O’Hara: I've even heard old real estate agents talk about the days when they carry dimes, like not even quarters, just dimes. They would go to a pay phone, phone their office, and then phone back later. That's how they relayed messages. So a pager was probably a huge investment or a huge thing for them.

Greg Dent: That was the big technology of the day. Now we're all so used to being able to email things off of our phone, but it's almost comical to think back. Even when I started in real estate, I carried an all-in-one machine in the trunk of my car so that I could print, sign, and scan all at the same spot. Not that long ago we were doing that.

Shawn O’Hara: I know that was a conversation with Dan Bennett of being able to do real estate anywhere, whether it's on the beach or anywhere else.

Greg Dent: We have Marty Douglas lined up.

Shawn O’Hara: Marty Douglas, lovely.

Greg Dent: Marty, formerly from the BCFSA, now working at BCREA and a long-time, probably very well-known, I would assume, from people listening to this podcast, professional advisor, professional standards advisor, and one of the two people who have filled that role over at BCREA now in supporting managing brokers across this province. That's a great guest and look forward to chatting with him for sure.

Shawn O’Hara: We also have his counterpart lined up, Jim McCaughan.

Greg Dent: Look at that. We completed the duo. Yes. Lovely.

Shawn O’Hara: Jim's in Chilliwack and Marty is in the Comox Valley, Courtney Comox area.

Greg Dent: Both of those are long-term members of the industry, of organized real estate here in BC, and both of them will be able to give a really cool broad view of both current effects and have the historical background to be able to talk with force, honestly. That'll be really awesome.

Shawn O’Hara: I also have one more guest lined up that's committed, Cale Greve, who's a local Remax REALTOR® here in Victoria. Because I had spoken to so many brokers and agents who had been doing this, I think if I total up the number of years from everybody I've talked with, it's probably about 200-300 years worth of real estate. I wanted to pick Cale with less than 10 years in the industry to get his perspective on the regulation and people who haven't quite seen all of the changes that everybody else has.

Greg Dent: I think it's interesting to not forget that and that's something that I've talked with newer agents about how, for those of us who have been doing it long enough to have seen these as changes, then they are changes and therefore are burdens. But for the agent who started last year, having to do a disclosure representation and trading services when you first meet a client, that's not new. That's just what you do. That's how real estate is conducted. Having to identify your clients for FINTRAC purposes up front and early and properly isn't new. That's just the way your business is conducted. I think it'll be interesting for us to have those conversations with newer agents as well.

Shawn O’Hara: There's also other people I've been in touch with who have not committed, so I won't give their names. Some are managing brokers, some are compliance officers. One is a notary, another is a property manager, a couple of people in commercial real estate as well, which also have to respond and deal with regulations.

Greg Dent: It'll be interesting to talk with some people from the mortgage broker sector. There's a pretty big compliance change happening in their sector come October 11th, don't quote me on the date, but October 11th. Mid-October-ish this coming year, where they will now be under FINTRAC rules. That's going to be a fairly big shift in the compliance landscape for them, and I know that there's a fair bit of apprehension around what that looks like for the sector.

Shawn O’Hara: That would be neat and possibly somebody from the armored car industry because starting this summer, FINTRAC will also bring armored cars, private armored cars, the people who haul money, under there.

Greg Dent: The other sector at some point would be the diamond jewelry sector. The reason that might be interesting, they're also under FINTRAC rules. If you look at some of the recent FINTRAC fines that have been published, two of them were in the banking sector. To me, where the real pain point of compliance is and who I think is interesting are people who are in smaller businesses and those are challenges for compliance because specifically because they're smaller businesses. The average real estate office just isn't, actually, very few real estate offices are million-dollar operations where they can spend a million dollars on a compliance program. That's just not the reality for any real estate office that I've seen. Similarly, the diamond and jewelry sector has a very similar setup where it's a lot of mom-and-pop small-time shops who are still subject to all of the same rules and regs that CIBC and RBC are, and CIBC and RBC have literally multimillion-dollar programs in place. They are getting fined. We saw those fines published over the last few months, but the diamond and jewelry sector is equally being, let's say, thoroughly looked at by FINTRAC is probably the nicest way to put that for the purposes of this podcast.

Shawn O’Hara: A fine of 50,000 can be devastating for them. It would wipe them out. Even some of the smaller brokerages, some of the real estate brokerages, 50,000 fine, and they're closing shop.

Greg Dent: One of our clients became our client after the ownership changed because they got a FINTRAC fine that caused the previous owner to say, you know what, we're out. The numbers just don't pencil anymore. It doesn't make sense. They're now our clients and we have a great relationship with them, but the sad part about that story is that there was an owner of a small business who had to sell essentially or made the decision to sell anyway. Therefore, the burden of compliance is real.

Shawn O’Hara: Something I'd like to explore more is, and in some of my conversations and what a lot of people probably don't realize is that there are no set rules. It's not like FINTRAC and BCFSA have outlined exactly what an agent or a business has to do. They basically have the law and the various laws that provincial and federal laws that they follow. Those are interpreted by BCFSA and by FINTRAC. When they go into audit, there isn't necessarily clear direction. That's why each real estate agency will have their own procedures and their own ways of doing everything because they're trying to interpret. One broker was telling me he made all his procedures. He went through an audit and the auditor said, that's great. You don't have to do this. Everything's good. Six months later, another auditor came in and said, you did it wrong. You're not tracking this. You're supposed to be.

Greg Dent: It's something I hear a lot when I talk with compliance officers across this country. Now what's even more interesting is despite the, so most of my work is in the FINTRAC space. I can certainly talk to that end of things. One of the biggest things I'll hear is we just want an easy way to comply. The sad reality for those people who are listening and who are looking for that is that's not going to happen. Certainly not from the regulators themselves. That's actually one of the things that we've done in my business. We're ReallyTrusted. We have a way for brokerages to subscribe to what we call an all-in-one solution to FINTRAC compliance. The reason we saw that opportunity, the reason that's powerful for brokerages is specifically because of all the gray areas involved in a compliance program. Ultimately, as much as I hear the pain of that, the reality is a compliance program has to be specific to a brokerage. A regulator just simply can't provide a, you must do this and you must do that because every business is different. As much as people might think they want the regulator to tell them exactly how to do things, the challenge becomes as soon as the regulator is telling you how to do things, you're no longer actually free to run your business how you feel like you should be running your business. That's equally not a good option is how I would phrase that probably. It's an interesting thing.

Shawn O’Hara: That's a neat perspective.

Greg Dent: I look forward to some of these conversations in the future. Some of the themes that we've talked about today, these concepts of the burden versus the benefit of the concept of one path versus having to have a customized program, the concept of cost and the value of that cost to the business.

Shawn O’Hara: I'd also like to get some of the regulators on as guests as well. They could give their perspective. All right. That's an exciting adventure. That's it for today. I guess we say that's a wrap.

Greg Dent: That's a wrap.