Legal Question in Real Estate Law in California

None, because you almost certainly should NOT do it. If you have a mortgage, putting additional people on title will violate the due on transfer or sale clause of your loan agreement and deed of trust. Will your parents be on MediCal, Medicare or any other government subsidized medical payment program now or at any time while on title? Then it will make it harder for them to qualify and if they do qualify it will give the government a reimbursement lien on your house. Do you have equity in the house? If so you could be subject to gift tax on the value of the interest you give them, since you are not receiving equal value for it. Are you doing this to reduce your equity in the house to avoid creditors? If so, you and your parents can be sued for fraudulent transfer. And no matter what the circumstances, it will trigger transfer taxes and a reassessment of the property taxes on the share you give them. You need to talk to a knowledgeable attorney about why you want to do this, and what alternative methods may be available to achieve the desired results without all the terrible consequences that come from just giving away in interest in real estate.

I strongly agree. Your question does not address why you are doing this, but simply asks how. Adding owners is not a "simple" transaction. And what do you think will happen when one of the new owners drives a car into a school bus, and gets sued? Do you mind having the house sold to pay the debt or leined during the law suit? Are you prepared to file the forms needed to avoid property tax reassesment at teh time of transfer, which is likely if you do not make the appropriate claims? Have you considered adding the new owners to your homeowners insurance policy? Will this impact your insurance or any umbrella policy in effect? Why would you want to increase the equity your parents own? This is contrary to most estate planning where we are trying to move wealth downstream. Are you prehaps planning to get an income tax basis adjustment at the death of a parent? Do you know you may be losing all or part of the exemption from iincome for tax on sale of a personal residence? The list is almost endless.

First, it is a common error to think in terms of adding someone to a deed. What you really want to do is add your parents to the TITLE of your house.

Second, there are several major problems that MAY arise if you do this. I'll list and briefly describe the more important possible problems to consider:

1. If your house is financed, the note+deed of trust documents will more likely than not contain a so-called "due on sale" clause. The effect of the usual due on sale clause is to make your entire loan immediately payable in full as soon as there is any change in ownership. You should look for such a clause in any financing documents, and discuss getting a waiver with the lender. Get it in writing and be prepared to pay a service charge (lender policies will differ, however).

2. Changes in real-estate ownership trigger income tax consequences. Both the state and the feds will be expecting you to report any capital gain or loss you realized on the transaction, or, perhaps your parents may possibly be liable for a gift tax. Check it out with a tax advisor.

3. The transfer of an interest will also have an impact on property taxes (probably, at least).

4. Finally, there will be questions regarding management and occupancy rights and obligations. Who will pay the property taxes? Who will decide when a new roof is needed? Who gets the big bedroom? When do we sell? ...and so on.

If, after doing all your research, you decide to go ahead, you can use any of the mentioned deed forms to add your parents to the title, but in order to avoid a mistake or two, I'd suggest getting some professional assistance from someone who understands real estate. The charge by an attorney, real estate broker, title company, or whomever should be low to nil, and the cost of a mistake could be very high. For example, you'll need to specify how title will be held (probably tenants in common rather than joint tenants), and clearly specify the percentage interest being transferred. Also, if a gift is involved, that fact should probably be noted somewhere on the deed to avoid transfer taxes based on transaction amount.

Ultimately, the choice of a deed form (grant, warranty or quitclaim) may be less important than the other matters mentioned. Any of them will do the job; the difference lies in the extent to which the transferor (you) guarantees good title to the transferee.