Code:
on 1:JOIN:#avatarrp:{
  if ($nick isin %list) {
    /mode #avatarrp +h $nick
  }
  else {
    msg $chan Welcome to $chan $nick
  }
}

There's nothing wrong with using multiple lines and it can make locating just where a problem exists a lot easier.

If you want to have it all on one line, then you need to put a pipe | in front of the else statement (remember there needs to be a space on both sides of the pipe)
Code:
on 1:JOIN:#avatarrp:if ($nick isin %list) { /mode #avatarrp +h $nick } | else { msg $chan Welcome to $chan $nick }