Market operators threaten legal action if tenants don’t agree to new lease

The dispute between the market’s operators and tenants has escalated once again.

Tenants at Melbourne’s fresh food market at Epping have been threatened with legal action if they don’t accept new lease terms or vacate their site within 30 days.

The market’s state government appointed operators Melbourne Market Authority has sought a Supreme Court declaration clarifying whether it can legally evict tenants who do not sign the new lease terms, which include rent rises of up to 38 per cent.

On Tuesday, MMA issued formal letters to 17 tenants who have reached the end of their nine-year lease term and were subject to a market rent review.

They have 30 days to accept the new terms or face eviction, and will prove a test case for the next 100 lease agreements due for renewal in August this year.

The dispute dates back to last October when the MMA informed market tenants that rents would rise between 6.7 and 7.6 per cent annually for the next 10 years, beginning in November.

Fresh State, a member organisation representing market wholesalers and traders, cried foul and said the rental increases were blatant “cash grabs” that would push up fruit and vegetable prices and put wholesalers out of business.

Fresh State and the MMA have been in tense negotiations since, culminating in the MMA’s letter on Tuesday outlining the new lease offer of a base rental adjustment of between 23 and 38 per cent over the next nine years, depending on store sizes and locations.

Melbourne Market Authority chair Peter Tuohey says the new lease terms follow months of negotiations with market traders. Picture: Andy Rogers

MMA chair Peter Tuohey said the new leases reflected current market valuations assessed by the Valuer-General, which valued the premises at between $35,600 and $121,600 and followed extensive negotiations with tenants.

“The MMA has worked hard to reach this point, engaging in extensive discussions and conciliation over many months, and we are pleased with the outcome, which brings closure to a complex issue and a final rent position below the previously determined market

Valuation,” Mr Tuohey said.

He said additional concessions have been offered including a reduced security bond and electricity savings.

Of the 17 tenants offered the new lease, five have signed the agreement and the remaining 12 are being asked to vacate their site if they remain unhappy with the new terms.

“To ensure full legal certainty for all parties, the MMA will commence legal proceedings in the Supreme Court to determine the current status of tenant agreements and confirm the enforceability of leases. This step has been taken in the interest of transparency and fairness,” the MMA said in a statement.

A number of Fresh State representatives said they were taken back by the MMA’s threat of legal action but were not yet in a position to comment until they had digested the news.

Victorian Farmer’s federation presidnt Brett Hosking said it appeared as though the MAA has listened to wholesalers and made that step to reduce rates, but it appears a bit presumtive to seek that clarity from the Supreme Court at this early stage,” Mr Hosking said.

He said he also feared the rent rises would be passed down the supply chain, “we don’t want to see those passed onto growers”.