We are a supplier and filed a lien claim in NY. The GC bonded around it, and the surety bond company is requesting we release the lien claim before they will pay the claim. I said no, but I wanted to know my rights in NY.
I would not recommend releasing the lien before payment. Normally if there is an attorney involved, it would be acceptable to provide a lien release to the surety's attorney to hold in trust pending payment. That way, they have it in hand but can't record it and release the lien until you have the payment in hand. That avoids the chicken and egg problem you have pointed out by your question. If they don't have an attorney then someone needs to hold in escrow pending payment.
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