Shanmugam & Vivian Balakrishnan Share Reasons Behind Renting Ridout Road Bungalows
On 3 July, Law Minister K Shanmugam and Foreign Affairs Minister Vivian Balakrishnan fielded questions in Parliament regarding their tenancies of two black-and-white bungalows along Ridout Road.
Among the many questions MPs posed, there were some regarding why they decided to rent government property instead of buying their own.
To that, Dr Balakrishnan said he was looking for a larger home for his expanding family.
On the other hand, Mr Shanmugam chose to rent because he was selling his previous family home.
Vivian Balakrishnan & family was looking for new home for expanding family
Both ministers revealed in Parliament on Monday (3 July) that they based their decisions to rent the state properties on personal grounds.
Mr Vivian Balakrishnan started his address with the fact that he and his wife have four children. They are between 17 and 24 years old.
Two of their children married and had children by 2018. As such, the Balakrishnans wanted a house for their expanding family. This will ensure that their grandchildren can be under the same roof while they are still young.
Source: CNA on YouTube
“I think older members will appreciate that attempting to do this requires consent and concurrence of the son-in-law and the daughter-in-law. It also means each nuclear family has to live with their children in the same bedroom,” he shared.
“My children agreed, and we began this journey.”
Mrs Balakrishnan drove past “For Lease” sign at 31 Ridout Road
At that point, they were aware of the hundreds of black-and-white bungalows across Singapore. They did their “initial due diligence” by going through the State Property Information Office website.
“So we had a sense of the market at that point in time,” he said, highlighting that the rental market in 2018 was in decline.
Mrs Balakrishnan then drove past 31 Ridout Road on her way to a friend’s place one day in September 2018. She saw a “For Lease” sign on the property and decided to call the phone number on it.
The number connected her to a property agent from Colliers International Consultancy and Valuation.
Balakrishnans not aware of guide rent when they made offer
The asking rent the agent quoted the Balakrishnans for 31 Ridout Road was S$19,000. However, the property has been vacant since 2013 and was in “an advanced state of disrepair”.
Source: Google Maps
After some back and forth, the Balakrishnans agreed to undertake improvements at their own cost on top of the asking rent. Mrs Balakrishnan signed a “standard tenancy agreement” of 3+2+2 years with Colliers in October 2019.
Mr Balakrishnan disclaimed that, at that point, they were not aware of the guide rent. They were also unaware of the two prior bids, at S$12,000 and S$5,000, for the house in July and August 2018.
In 2022, Mrs Balakrishnan got a 3+2 years renewal. Currently, they are paying an increased rent of S$20,000 per month.
Shanmugam decided to rent because he was selling his family home
As for Mr Shanmugam, he stated that issues regarding one’s home are “very private matters”. However, he acknowledged his position as an elected official.
He said that the lines between personal and public may not always be clear in such situations.
Mr Shanmugam explained that he is renting the property as he decided to sell his family home. As he had already reached his 60s, he realised that too much of his savings was tied up to his family home.
He had bought his family home using money from when he was a lawyer. His income subsequently changed when he became a minister.
Source: CNA on YouTube
“I was advised not to have most of one’s savings in one asset. So, I decided to put my family home for sale,” explained Mr Shanmugam.
Did not sell previous house for financial need
He hence settled on living in a rental property to prepare for the sale. At the same time, he pointed out that he did not sell his family home because of financial need.
The Law Minister supplemented by saying he does not regret giving up his previous earnings as a Senior Counsel.
“It is a privilege to be in public service. And if I am asked, I will make the same choice again.”
He denied that he is making money from the difference in rent by renting out his family home and living on 26 Ridout Road.
Source: Google Maps
Taking taxes into consideration, as his previous house is now non-owner occupied, he is making a net deficit that he needs to top up.
Even though money from the rent of his previous house goes into his rental at 26 Ridout Road, he shared that he is still essentially paying for this new place with money from his days as a lawyer.
No corruption in Ridout Road rental transactions of Shanmugam & Vivian Balakrishnan
This follows the conclusion of the Corrupt Practices Investigation Bureau’s (CPIB) review of the rental properties.
Senior Minister Teo Chee Hean headed the review at the behest of the Prime Minister.
Shanmugam & Vivian Followed Proper Processes In Ridout Road Rentals: Teo Chee Hean
It found no corruption or criminal wrongdoing on the part of those involved.
The report also verified that Mr Shanmugam and Mr Balakrishnan did not receive preferential treatment or access to privileged information in their respective rental transactions.
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Featured image adapted from CNA on YouTube.
