The flight instructor reported that during an instructional flight, when the tailwheel-equipped airplane was at rotation for takeoff, it sharply veered to the left. When safe flight was not assured, the flight instructor took over control from the student pilot, and subsequently landed the airplane in the grass area adjacent to the runway.

Postaccident examination revealed substantial damage to the fuselage.

The flight instructor reported no mechanical malfunctions or failures with the airplane that would have precluded normal operation.