Great question Brent,
We qualify the replacement resident per standard criteria. Once approved, we add the resident to the lease (writing a new lease that starts the day the new resident moves in and ending the date of the original lease).
Once everything is signed, we then process a Roommate Release, with appropriate forms, that absolves the original resident of their financial responsibility. The deposits stay on the account until move-out.
Having multiple residents going into the process can be difficult, as Anonymous posted. Unfortunately, we do not have a solution in place for that. I hesitate to say it, but it may involve civil court between the two residents if one won't sign a release.