Transferring an Endowment When it Ceases to Benefit
My mother has a house which is an endowment and this house has become very old, so that it is no longer fit for habitation, so I wish to transfer the endowment and sell the house, placing its price in a mosque, or charitable organisation or any other kind of charitable work. Is it permissible for me to do so?
It is not permissible for you to dispose of this endowment, nor to transfer it to something other than what was specified by the donor. If the benefits from it have ceased, it is permissible to transfer it to something else like it, or whatever fulfils its function, such as land, a shop or date-palms, its proceeds being utilized in the same cause as the proceeds from the house - and this should be done through the Court in the town in which the endowment is situated.
Shaykh `Abdul-`Azeez Bin Baz
Fatawa Islamiyah, volume 5 / page 34-35