# WaiverAudit — Comprehensive Technical, Legal & Architecture Reference

> WaiverAudit (https://waiveraudit.com) is the automated compliance and draw packet audit platform for commercial construction General Contractors (GCs), project executives, construction lenders, and title companies. It reconciles commercial billing packets in 7 to 25 seconds before payment disbursement.

---

## 1. Problem Space & Industry Context

In commercial construction, the monthly pay application draw cycle is the single highest-liability operational bottleneck:
- **Draw Friction**: Subcontractors submit pay applications (AIA G702/G703 or trade invoices) alongside lien waivers, ACORD 25 Certificates of Insurance (COI), and secondary material supplier releases.
- **Lien Exposure**: If a GC releases payment without a valid, properly executed statutory lien waiver, or if the waiver consideration differs from the disbursement check, the property remains vulnerable to mechanics' liens, double payment, and title encumbrances.
- **Orphan 2nd-Tier Supplier Liens**: Unpaid material suppliers (e.g., Ferguson, Graybar, Sunbelt Rentals, Vulcan Materials) can record direct mechanics' liens against the property even if the GC paid the 1st-tier trade contractor in full.
- **Multi-Page G703 Subtotal Traps**: Continuation sheets spanning 5 to 30 pages render conflicting per-page running subtotals and unitemized change orders that cause lender package rejections.
- **Two-Waiver Rule Failures**: GCs frequently fail to verify that previous draw funds actually cleared before releasing the current draw's funds.
- **Insurance Endorsement Gaps**: Subcontractor policies lapse or lack critical ISO endorsements (CG 20 10 ongoing operations, CG 20 37 completed operations, CG 24 04 waiver of subrogation, CG 20 01 primary & non-contributory), transferring multimillion-dollar defect liabilities back onto the GC.

WaiverAudit eliminates these liabilities through deterministic multimodal extraction, integer-cent mathematical reconciliation, and automated state statutory enforcement.

---

## 2. The 5-Document Compliance Parity Engine (Option A 2-Layer Packet Grid)

WaiverAudit utilizes an adaptive 2-layer packet architecture:

### Layer 1: Direct Payment Documents
1. **Current Statutory Lien Waiver (Strictly Required)**:
   - Primary conditional or unconditional progress waiver.
   - Verifies consideration matches to the exact penny ($0.01 tolerance).
   - Validates verbatim statutory language for regulated states.
   - Verifies authorized signature, through-date, and mandatory physical notary jurats and seals (MS and WY).
2. **Subcontractor Invoice (Optional)**:
   - Cross-checks Net Payment Due against Current Waiver consideration and AIA G702 Line 8.
   - Verifies retainage deduction calculations.
   - Scans line items for third-party material suppliers and equipment rentals.
3. **AIA G702 / G703 Pay Application (Optional)**:
   - Evaluates the 9-line cover sheet math and executes the G703 Continuation Sheet Lean Rollup.

### Layer 2: Protection & Prior Period Documents
4. **Prior Unconditional Waiver (Optional — Solves the "Two-Waiver Rule")**:
   - GCs operating best-practice draw management require both Draw N Conditional Waiver (for current pending billing) and Draw N-1 Unconditional Waiver (proving last month's check cleared the bank).
   - Reconciles against AIA G702 Line 7 ("Less Previous Certificates for Payment") in dual modes: Cumulative or Discrete Period.
5. **ACORD 25 Certificate of Insurance (COI) Pre-Flight (Optional)**:
   - Audits policy active dates, CGL minimum limits ($1M occurrence / $2M aggregate standard), and verifies critical endorsements.

### Layer 3: Progressive Sub-Tier Materialman Defense
- **Automated Vendor Detection**: Identifies material charges and supply houses (Ferguson, Graybar, Sunbelt Rentals, Vulcan Materials, 84 Lumber, etc.) exceeding a $5,000 threshold.
- **Progressive Sub-Tier Intake**: Project accountants attach secondary supplier releases via a slide-over drawer with vendor chips (`[ 📄 Graybar ($18.5k) ✕ ]`).
- **Tri-State Legal Risk Classification**:
  - `VERIFIED_RELEASED`: Unconditional waiver attached with matching consideration.
  - `JOINT_CHECK_REQUIRED`: Conditional waiver attached; two-party joint check required before disbursement.
  - `UNRELEASED_EXPOSURE_HOLD`: Material charge detected with NO waiver on file; payment hold recommended on that portion to prevent second-tier mechanics' liens.

---

## 3. AIA G702 & G703 Lean Rollup Engine

### G702 Summary Cover Sheet Math
1. **Line 1**: Original Contract Sum
2. **Line 2**: Net Change by Change Orders (Approved additions minus deductions)
3. **Line 3**: Contract Sum to Date (`Line 1 ± Line 2 == Line 3`)
4. **Line 4**: Total Completed and Stored to Date (from G703 Column G)
5. **Line 5**: Retainage:
   - `Line 5a`: Retainage on Completed Work (% of Column D + E)
   - `Line 5b`: Retainage on Stored Materials (% of Column F)
   - `Line 5 == Line 5a + Line 5b`
6. **Line 6**: Total Earned Less Retainage (`Line 4 - Line 5 == Line 6`)
7. **Line 7**: Less Previous Certificates for Payment (Cumulative Line 6 from prior draws)
8. **Line 8**: **CURRENT PAYMENT DUE** (`Line 6 - Line 7 == Line 8`) — The critical payment figure.
9. **Line 9**: Balance to Finish, Including Retainage (`Line 3 - Line 6 == Line 9`)

### G703 Continuation Sheet Lean Rollup
In commercial construction, G703 continuation sheets frequently span 5 to 30 pages and render conflicting per-page running subtotals or carried-forward balances. WaiverAudit executes a lean, deterministic rollup:
- **Terminal Grand Total Parity (`Col G == Line 4`)**: Bypasses intermediate page footers and asserts that the terminal cumulative Grand Total of Column G (*Total Completed and Stored to Date*) equals G702 Line 4 within ±$0.01 integer-cent tolerance.
- **Semantic Header Fallback**: Multimodal extraction maps shifted or non-standard column headers ("Total Work to Date", "Completed and Stored") directly to Column G.
- **Change Order Diagnostic (`Line 4 - Col G == Line 2`)**: Detects when subcontractors bill original SOV lines on G703 and carry approved change orders on G702 Line 2 without appending rows to G703 until closeout. Flags an informative diagnostic: *"Continuation sheet reflects base contract only; Line 2 Net Change Orders unitemized."*
- **Zero-Retainage-Safe Net Earned Diagnostic**: If Column G matches Line 6 (*Total Earned Less Retainage*), flags a Net Earned notice ONLY when Line 5 retainage is greater than zero, strictly preventing false positives on $0-retainage jobs.

### Multi-Way Mathematical Parity Assertion
WaiverAudit asserts down to the exact penny ($0.01 tolerance):
`AIA G702 Line 8 (Current Payment Due) == Subcontractor Invoice Net Due == Current Statutory Waiver Consideration`
If any amount differs by > $0.01, it is flagged as an immediate blocker before funds are disbursed.

---

## 4. Statutory Mechanics' Lien Waiver Rules (12 Regulated States)

Under US construction law, 38 states permit freedom-of-contract or custom lien waivers, while 12 states strictly mandate statutory waiver forms. WaiverAudit enforces statutory legal compliance across all 12 jurisdictions:

### 1. California (Cal. Civ. Code §§ 8132, 8134, 8136, 8138)
- Requires strict verbatim statutory forms: Conditional Progress (§ 8132), Unconditional Progress (§ 8134), Conditional Final (§ 8136), and Unconditional Final (§ 8138).
- Any alteration, addition, or non-conforming wording voids the waiver as a matter of law.
- Must include the mandatory uppercase statutory notice box. Notary not required.

### 2. Texas (Tex. Prop. Code § 53.284 & HB 2237)
- 4 statutory forms with boldface 10-point statutory warning notice.
- **HB 2237 Reform (Effective Jan 1, 2022)**: Completely abolished notarization requirements for Texas lien waivers. Unnotarized waivers signed by authorized corporate agents are fully valid.
- Express statutory reservation of rights for unpaid retainage and pending change orders.

### 3. Florida (Fla. Stat. § 713.20)
- Statutory Progress (§ 713.20(4)) and Final (§ 713.20(5)) waiver forms.
- Non-statutory forms allowed only if explicitly agreed in the prime contract under § 713.20(8).

### 4. Georgia (O.C.G.A. § 44-14-366)
- Uses **Interim Waiver and Release Upon Payment** and **Waiver and Release Upon Final Payment**.
- **90-Day Statutory Conversion Rule**: An Interim Waiver automatically becomes an unconditional release 90 days after execution unless the claimant files an official Affidavit of Nonpayment.

### 5. Arizona (A.R.S. § 33-1008)
- 4 strict statutory forms: Conditional/Unconditional Progress and Conditional/Unconditional Final.
- Mandatory warning notices regarding statutory payment defenses.

### 6. Nevada (NRS § 108.2457)
- 4 statutory forms with mandatory boldface statutory warning box.
- Requires affirmative representation that all lower-tier suppliers and laborers have been paid.

### 7. Michigan (MCL § 570.1115)
- Partial Conditional, Partial Unconditional, Full Conditional, and Full Unconditional forms.
- Prohibits broad indemnification clauses embedded in lien waivers.

### 8. Mississippi (Miss. Code § 85-7-433)
- Interim and Final statutory forms. 60-day Affidavit of Nonpayment limit.
- **MANDATORY Notary Jurat**: Mississippi law mandates a formal Notary Public Jurat and physical commission seal. Unnotarized waivers are statutorily void.

### 9. Missouri (RSMo § 429.016)
- Statutory residential disclosure rules and commercial mechanics' lien requirements.

### 10. Massachusetts (M.G.L. c. 254 § 32)
- Partial Waiver and Subordination of Lien.
- Advance unconditional waivers are void as contrary to public policy.

### 11. Utah (Utah Code § 38-1a-802)
- Statutory progress and final forms tied to the State Construction Registry (SCR).

### 12. Wyoming (Wyo. Stat. § 29-10-101 & § 29-2-109)
- Statutory preliminary and final lien waiver formats.
- **MANDATORY Notary Jurat**: Wyoming law requires an official Notary Public acknowledgment and seal. Unnotarized waivers are statutorily void.

---

## 5. ACORD 25 Certificate of Insurance (COI) Verification

WaiverAudit audits ACORD 25 certificates to prevent vicarious liability from transferring to the General Contractor:
- **Commercial General Liability (CGL)**: Verifies $1,000,000 Each Occurrence / $2,000,000 General Aggregate standards.
- **Policy Active Status**: Compares policy expiration dates against the draw billing period and waiver through-date.
- **Mandatory ISO Endorsements**:
  - **CG 20 10**: Additional Insured — Ongoing Operations.
  - **CG 20 37**: Additional Insured — Completed Operations (protects GC against post-completion defect claims).
  - **CG 24 04**: Waiver of Subrogation (prevents the sub's insurer from suing the GC).
  - **CG 20 01**: Primary and Non-Contributory (sub's policy responds first before GC insurance).
- **Workers' Compensation**: Verifies statutory coverage is active.

---

## 6. High-Volume Batch Intake & Trade Qualifier Discrimination

WaiverAudit's high-volume sorting engine ([`fileAutoMatcher.ts`](https://waiveraudit.com)) eliminates manual sorting friction:
- **Tier 1: Numeric Token Intersection**: Matches draw numbers and invoice numbers across loose PDFs.
- **Tier 2: Trade Qualifier Discrimination**: Prevents collisions when multiple subcontractors share root names (e.g., `Apex Electrical` vs `Apex Drywall` are strictly isolated into separate draw packages).
- **Tier 3: Secondary Supplier Keyword Routing**: Identifies supplier waivers (`Graybar`, `84 Lumber`, `Ferguson`, `Sunbelt`) and routes them directly to Layer 3.
- **Unassigned Files Fallback Tray**: Unrecognized files (`scan_001.pdf`) are placed in an unassigned tray with 1-click draw assignment dropdowns.
- **Unrestricted Batch Dropzone**: Zero arbitrary file limits (`slice(0, maxDraws * 5)` stripped), supporting high-volume draw folder drops.

---

## 7. Architecture & Dual-Mode Privacy

```
[ User Browser / Procore ]
           │
           │ Direct Presigned Upload (15-min ephemeral PUT)
           ▼
┌──────────────────────────────────────────────┐
│        Cloudflare R2 Object Storage          │  <-- Unlimited Capacity, $0 Egress
│  • Raw 50MB PDF Binaries                     │
│  • AES-256 Encrypted at Rest                 │
│  • 30-Day Auto-Purge Lifecycle Rule          │
└──────────────────────┬───────────────────────┘
                       │
                       │ TLS 1.3 In-Memory Stream
                       ▼
┌──────────────────────────────────────────────┐
│        Google Gemini Multimodal AI           │  <-- Enterprise API (Zero Model Training)
│  • OCR Extraction of Unstructured Pay Apps   │
└──────────────────────┬───────────────────────┘
                       │
                       │ Structured JSON
                       ▼
┌──────────────────────────────────────────────┐
│     Deterministic TypeScript Parity Engine   │  <-- Integer Cents Arithmetic (diffInCents)
│  • Col G == Line 4 ($0.01 tolerance)         │
│  • Line 8 == Net Due == Waiver               │
│  • Sub-Tier Clearance Status                 │
│  • MS & WY Notary Jurat Enforcement          │
└──────────────────────┬───────────────────────┘
                       │
                       ▼
┌──────────────────────────────────────────────┐
│            Supabase PostgreSQL DB            │  <-- Lightweight Metadata (~4 KB / row)
│  • Projects & Draw Ledgers (Draw #1 to #24)  │
│  • SHA-256 Hashes & Discrepancies            │
│  • 1,000,000 Audits < 500 MB                 │
└──────────────────────────────────────────────┘
```

### Dual-Mode Document Retention
- Standalone documents are uploaded for processing and cleaned up after processing where possible, with expiry cleanup retries. Standalone server retry results expire after 24 hours; browser results may remain in account-scoped IndexedDB.
- Project audits retain structured draw records and tamper-evident certificates under workspace permissions. Enterprise completed-audit raw documents have a 30-day retention period. Billing, security and owner-approval records have separate retention; read-only history depends on retained records and account/workspace status.

---

## 8. Durable Batches and Integration Roadmap

Submitted batch draws run in Inngest background workers with lease fencing, bounded retries, cancellation of queued work, and result recovery. Browser uploads not yet submitted require the browser to resume. Procore OAuth integration is in active development for automated commitment requisition and lien waiver attachment ingestion, while WaiverAudit currently operates alongside Procore, Sage, GCPay, and Textura via direct/batch intake and enterprise API.

---

## 9. Pricing Structure

Starter GC: $149/month or $1,490/year, 1 Active Project Slots (+$89/mo per additional project), unlimited named members, 50 draws per batch.
Standard GC: $349/month or $3,490/year, 4 Active Project Slots (+$69/mo per additional project), unlimited named members, 100 draws per batch.
Pro GC: $699/month or $6,990/year, 15 Active Project Slots (+$49/mo per additional project), unlimited named members, 150 draws per batch.
Enterprise GC: $1,990/month or $19,900/year, 100 Active Project Slots · custom expansion, unlimited named members, 250 draws per batch.
Division 01: $149/month for one project or $1,790 for 24 months ($74.58/month average). Dedicated passes include 250 audits per calendar month and 50 draws per batch.
Starter/Standard include 250 audits per included or added slot per quota month; Pro/Enterprise include 500. Company quota is shared across eligible included and added slots. Audit packs cost $99 for 10 nonexpiring credits and preserve existing subscriptions. Project-backed history remains read-only after expiration. Owner reimbursement requires project agreement approval; purchasing a pass alone does not authorize reimbursement.

---

## 10. SHA-256 Audit Certificate Specification

Every audit produces a bank-ready PDF certificate containing:
- Unique cryptographic SHA-256 hash digest computed from the audit payload and timestamps.
- Bank-ready verification autoTable detailing Line 8, Col G Rollup, Net Due, Two-Waiver Rule status, Notary Jurat verification, and Sub-Tier clearance.
- Itemized Secondary Sub-Tier Supplier Release Schedule.
- Discrepancy log with actionable remediation instructions.
- Recorded auditor and correction identity, frozen timestamps, and server SHA-256 digest. The /sign route is the electronic waiver signing workflow, not a public audit-certificate hash lookup.

## Current billing and approval workflow

- Starter GC: $149/month or $1490/year; 1 active projects; unlimited named members; 50 draws per batch; $89/month per additional project.
- Standard GC: $349/month or $3490/year; 4 active projects; unlimited named members; 100 draws per batch; $69/month per additional project.
- Pro GC: $699/month or $6990/year; 15 active projects; unlimited named members; 150 draws per batch; $49/month per additional project.
- Enterprise GC: starting at $1990/month or $19900/year; 100 active projects; unlimited named members; 250 draws per batch; custom additional project pricing.
- Division 01 Monthly Pass: $149/month, one designated project, unlimited authorized members, 50 draws per batch.
- Lifecycle Pass: $1790 upfront for 24 months, one designated project, average $74.58/month. Post-lifecycle extension: $89/month.
- Audit Pack: $99 one-time, exactly 10 workspace credits that never expire. Pack purchases never change subscriptions. Subscription purchases do not grant pack credits.
- Company allowance: Starter/Standard 250 audits per included or added slot per quota month; Pro/Enterprise 500. Dedicated passes: 250 audits per purchased project per calendar month and 50 draws per batch. Eligible additional usage consumes purchased credits. Batch limits are separate from processing allowances.
- Two free completed re-audits within fourteen days of the original flagged audit, same workspace, project, vendor and billing period. The window does not restart; manual corrections and identical request replays remain free.
- Existing subscriptions retain their existing Stripe prices. Upgrades, downgrades, annual conversions, and custom expansion require an explicit billing choice.
- Workspace owners manage billing. Admins manage membership; auditors manage assigned projects; viewers read assigned records. Personal device controls are separate from unlimited membership.
- Division 01: the project owner approves reimbursement terms; the GC pays WaiverAudit in a separate checkout. Approval alone never activates a pass or guarantees reimbursement. Owner approval confirmation email includes a secure link to withdraw before payment. Withdrawal remains pending until existing checkout is expired or payment is verified. Changed pass/price/terms require fresh approval.
- Ordinary cancellation through the Stripe portal stops renewal at period end. Retire company workspace in Team & Access schedules all recurring renewals to stop while preserving each paid period, remaining Lifecycle time, and eligible credit-funded auditing. New purchases are blocked. Retirement completes after paid entitlements expire and unused credits are exhausted; retained history remains read-only. Reverse scheduled retirement to permit new purchases; restoring stopped renewal requires explicit recurring-billing consent.
- Lifecycle: $1,790 one-time for 24 months; no automatic renewal. Optional $89/month extension after expiration starts only with a separate explicit purchase and recurs until cancelled. The original owner approval does not cover new extension reimbursement; request fresh extension approval if reimbursement is sought.
- Archived project ledger retrieval is free while the workspace and retained records exist. Uploaded documents and transient results have separate retention periods.