Legal Question in Real Estate Law in California

You probably mean "added to title" rather than "added to the grant deed." Deeds are transitory, one-time documents used to transfer, not hold, title. This is a common misunderstanding, and not really important.

The risks involved in adding a family member to title to a house are probably of three kinds. First, the owner "demotes" himself or herself to being only a co-owner. It becomes harder to manage or to sell the property, and the new co-owner will be entitled to co-possession.

Second, co-ownership will have income and property tax implications. Property taxes don't necessarily get re-assessed at current value if the new co-owner is a close relative, but that aspect needs to be checked. More significantly, making a below-market-value transfer will have a future capital-gains impact on the new owner that can be avoided if the part interest is passed via the current owner's will, or in a living trust.

Third, most home loans have a "due on sale" clause that is triggered by most kinds of change in ownership, including sale or gift of a half interest to a relative. Some lenders will waive the due-on-sale provision in such a situation (often for a fee), but unless the new owner and you are prepared to pay off or refinance, you really need to get something in writing from the lender giving you assurance that the transfer of the interest won't adversely affect your status as a borrower.

Mr. Whipple gave you a good answer. I would just add that there is an additional disadvantage not to the current owner but to the relative. Many relatives who receive property by will or trust after you die, only pay capital gains on any increase in the equity from the date of your death. If they go on title while you are still alive, whenever they sell the property they have to pay capital gains on all the equity from when you bought it. Depending on how much the property has appreciate, that can be a VERY expensive gift to the government. You should NEVER add anyone except maybe a spouse to title to real property without spending a few hundred dollars to consult with a real estate, or better yet an estate planning attorney and going over the specifics of your situation and what you are trying to accomplish by the change in title.