Is it permissible to sell an endowment (waqf) and replace it with another and lease it, and is it permissible for the heirs to benefit from the rental value, or must it all be given in charity?

Your father's endowment (waqf) is valid and enforceable. The trustee of the endowment is permitted to convert it into another form that offers a greater benefit to the beneficiaries, such as selling the property and investing the money in a similar one, or demolishing it and rebuilding it. If there is no one among the beneficiaries who needs the endowment, or if it exceeds their needs, the remaining part of the endowment should be disbursed to the needy individuals of the same category as the beneficiaries.