I filed a lien against a project. After we filed the lien, the hiring contractor now says they are able to pay us, but only after we release the lien.
Generally, it's a bad idea to release a lien before payment has been received. If the lien is released before payment is made, it's entirely possible that lien rights would be gone without payment in hand - and the contractor could put you in a tough spot without any leverage.
One option I've seen lien claimants utlize is to draw up a lien release document but not sign it - then provide that unsigned release to the customer as an example of what they'll be given in exchange for payment. Or, simply standing pat and demanding payment before releasing the lien is another common option - after all, the lien claimant is the one with the leverage, right?
In any event - the timing of a lien release can be tough. Levelset wrote this article to address the issue: Construction Lien Release Process: the Timeline is Tricky.
I wanted to add that once payment is made, a lien claimant is no longer able to take any action on the lien. It immediately becomes ineffective against the property (even if the lien will remain on the property record without further action being taken). So, if the customer is worried about taking the check and refusing to release the lien, that fear can mostly be put to rest.