Legal Question in Real Estate Law in California

That is something that a lawyer would want to review by reading the complaint and speaking to them before advising to either do or do nothing.

Ordinarily, the risk of failing to respond to a summons and complaint is substantial, even if the complaint is baseless and/or should have been directed to another defendant. Perhaps the proper response is a demurrer, rather than an answer. However, it's rather rarely advisable to let a summons and complaint go, without some kind or responsive pleading to the court, and served upon the plaintiff(s) and other parties (if any).

It is dangerous to just ignore a Complaint, as their rights to defense may be compromised as well as damages may be awarded against them. Seek a lawyer to review the documents and facts.

Everyone is telling you it is dangerous, but not why. If they do not respond, the attorney who filed the case will be able to take their default and obtain a default judgement against them, even if the case had absolutely no basis in the first place. If it really looks like this is just a simple mistake, the first step is to contact the attorney who filed the action and try to explain the mistake and get them to dismiss it as to your parents. If that does not work, then they need to take the complaint to a lawyer and get specific advice on how to deal with it.