Is it obligatory to hand over the house to the daughter of the owner whose house my father rented more than 25 years ago without a contract, knowing that the owner permitted my father to live in it as long as he resides in the city? And what is the Shariah ruling in this case?

Scholars have agreed that a lease (ijara) is not valid unless it is for a known duration. Therefore, a lease contract based on perpetual leasing is religiously invalid (batil shara'an) due to the unknown duration. It must be annulled, the leased property returned to its owner, and the lessee must pay the market rent for the period of their use.