Legal Question in Real Estate Law in California

If he quitclaims his interest to her only, and the proper paperwork is filled out along with the recording of the quitclaim, it should not trigger any reassessment, due to the parent to child exemption. If it is a quitclaim to the woman and husband, it would qualify for a reassessment as to 1/6 of the value of the property. Either way of doing it also severs the joint tenancy, creating a tenancy in common. The proper way to do this to avoid reassessment, assuming woman and husband want to own 50/50 and hold as joint tenants (which requires 50/50) is for father to quitclaim to daughter only, and then daughter and husband to grant deed to themselves as joint tenants. They would file transfer paperwork claiming the parent-child exemption as to the first deed and the inter-spousal as to the second.

On a final note, though not asked, the difference between 1/3 of the value of the property and 1/3 the outstanding mortgage balance, i.e., the father's equity share, could raise gift tax issues when granted to the woman. Probably it would not, but worth asking a tax accountant.