Eviction in a Self Directed IRA

[Gene Hacker]

I have a family friend that owns a rental home in a SD IRA. The tenant is behind a few months so they served a three day notice. After a couple weeks of unfulfilled promises they took the paperwork to the court house to start the eviction process. The court clerk told them that because its a trust they need to hire a lawyer and basically would not even look over the paperwork.

Is this common for a SDIRA? Is it possible to handle an eviction on your own without an attorney or it is a basic requirement when investing in a SDIRA?

I have advised them to settle with the tenant. I am not sure what they will do but either way I am curious if the court clerk is correct that a lawyer is required for evictions in a SD IRA.

[Ellis San Jose]

Another reason why owning real estate in your IRA can be treacherous. The IRA must pay for all legal fees with IRA funds. Plus by appearing for the IRA it may violate prohibited transaction rules.

I believe the court clerk is correct. Only the owner can represent themselves in court. Any entity requires an attorney (the IRA is an entity not an individual).