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George is the fee simple owner of a warehouse complex and adjoining yards. George lets the warehouse to David, with the lease containing a covenant that David will use the warehouse as a timber merchant. The warehouse contains a wood drying shed that relies on the free flow of air from the adjoining yards. After the grant, George erects a number of buildings on the adjoining yard that restrict the air flow. Which of the following statements best describes the legal position?
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George has breached the covenant not to derogate from grant as the land cannot be used for the purpose for which it was leased. A breach of the covenant for quiet enjoyment involves physical interference with the demised premises. However, where the landlord's actions on his own land prevent the use of the demised premises for the intended purpose, this amounts to a breach of the implied covenant not to derogate from grant.
Key Point: The covenant not to derogate from grant ensures that the landlord's actions do not prevent the tenant from using the premises for the intended purpose. This covenant protects tenants from any conduct by the landlord that would frustrate the use of the leased property as agreed.
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