I don't run into this very often, but I would be interested to hear other landlord's opinion on how to handle this:

Three roommates move in and sign the lease on July 1. September 1, two of the three call and say they kicked the 3rd one out (and they say she agreed to move out). They found a new roommate and want to put him on the lease. They can't find 1st tenant now as she has disappeared with boyfriend.

How would you handle the lease and damage deposit in this situation? Sublease? New Lease?

I would make one person financially responsible and put his/her name on the lease. Include the other two as subtenants. For your current situation, draw up a new lease and follow the above.

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Each person should have full liability for rent and condition. Each persons name should be on the lease. If going to court is required then you have a better chance of getting your money because you can sue all parties on the lease. Doing it as you suggested the landlord could only sue one of the parties and that party would be forced to sue his or her friends to recover their portion of the costs.

In the above case the former roommate/tenant has broken the lease by moving and not notifying the landlord. The remaining two should sign and acknowledge that a new lease is required and all parties should sign a new lease.

My leases do not allow a sublease without my prior approval.