Client was warned they would have a lien filed if they didn't make payment. After lien was already filed (3 weeks) they said they would pay but refuse to pay the lien fees. Can we require they pay them before releasing the lien?
This is in Louisiana!
Typically, this is the sort of thing that comes down to negotiations between the lien claimant and their client. Generally, claimants should release their lien once their paid what the amount on the lien. However, lien claims aren't free, so someone will have to pay the filing fees. It's perfectly reasonable for the claimant to demand that their customer pay for the cost of recovering payment.
What's more, even if the customer doesn't want to pay the cost of filing the lien, that cost only adds a small portion to their overall bill. The cost of spurring a legal dispute over the filing fees should far outweigh the cost of covering the filing fees. But, if it looks like there's no way the customer will pay them, and if it looks like they're prepared to enter into a full-blown dispute over the refusal to immediately release the lien without receiving the lien fee, then it might be best to forego those amounts.
While maybe not directly on point, this article may be useful to you: Construction Lien Release Process: the Timeline is Tricky.
Follow up questions:
1. Is there a limit to the amount of money you charge for collection and/or lien fees either a flat amount, a % of the lien or is it unlimited in order to enforce lien rights?
2. Same question but regarding attorney fees?
3. In the issue in the original question, the business owner was supposed to pay us. However, they hired a consultant and paid him the money and he was supposed to pay us. He is the one refusing the pay the lien fees and now saying to release the lien if we want payment or to go ahead and enforce the lien if we won't.
Question answers and suggestions are appreciated.
Late fees or interest should generally be limited to whatever is in the contract. And, if your contract doesn't specifically address interest and late fees, then adding them to the bill might not be very fair or defensible, and that could lead to further dispute. With that being said, if this is a commercial project, Louisiana's prompt payment laws may be in play if you were hired by someone other than the owner. If that's the case, statutory interest may be due at the rate of 0.5% per day (capped to 15%). More on that here: (1) Louisiana Prompt Payment Guide and FAQs; and (2) How To Make A Claim Under Prompt Payment Laws.
As for attorney fees - that's generally a negotiation item that the parties must figure out between themselves. Demanding that the other side pay for attorney fees is common, and it's also common that they'll refuse to pay the fees. However, if the mechanics lien does end up being litigated, attorney fees may well be awarded to the prevailing party. So, for a claimant who feels strongly that they'd prevail in an enforcement lawsuit, it might be a point of strength in negotiations over attorney fees.
Finally, when dealing with an intermediary who's failed to uphold their part of the deal, going over their head to the business owner could be a smart tactic to get the dispute resolved. Keeping the owner in the loop and letting them know it's their consultant's fault that the lien is in place could be effective - the consultant being incompetent (or greedy) and causing issues with the property may be enough for the owner to force the consultant's hand or to simply pay to make the matter go away. That's particularly true if it's a small amount of money at issue. Even taking things a step further and sending both parties a Notice of Intent to Foreclose could be effective. Attaching invoices, emails, text messages, or other documents showing what was owed and that the consultant refused to pay their bills could drive the point home, too.
For more information on how to get paid after filing a lien: The 4 Steps to Take After Filing a Mechanics Lien.