My home was completed in April 2001, and the air handler was installed in a closet in the garage. The closet's air space does not vent into the attic, garage, or inside living space which makes the air pretty warm and stagnant. Since I live in South Texas near the coast, the weather is typically hot and humid most of the year which causes condensation to build up on the outside of the air handler. The condensation was so bad, that the builder has had to replace the air handler, the platform, and some surrounding drywall.

Should I make the builder place the air handler in the attic? They placed a louver on the closet door (in the garage), but now I see a "not so nice" louvered door every time I drive into the garage.

You can try to insulate any exposed duct from on top of the furnace and the coil box. Most air handlers are insulated within their own chasis. All you really need is approx. 1"- 1 1/2" of glass insulation. Try to insulate any duct you can get to that is not within the conditioned space, this will help with energy management as well.

Thank you; however, the ductwork coming directly out of the air handler (plenum?) and the handler are insulated. We have had 3 different A/C companies check the pressure and freon levels, and everything checks out fine. My 1 year home warranty that covers everything is up; however, this should be covered since I reported it before my warranty expired.

Is it possible to insulate the closet? Have the contractor you called before checked the pan under the A-coil for mirco-cracks around the drain outlet? You said they checked the pressures of the refridgerant. Did they add any when they were there?

I guess the closet could be insulated. They have sealed the unit so much with a black tar-like gum that I doubt the drain or pan is leaking (I'll ask though). The condensation is all over the unit...even towards the top away from the drain. I'm pretty sure they have added refrigerant. When I talked to my local building inspectors, they had me ask if they overfilled the refrigerant. Four different A/C guys with 3 different companies have checked the levels and said that they are correct. They also increased the blower speed and the intake air filter is clean.

Here's my non-HVAC certified theory: the air passing through the handler is cold...the air around the unit is hot and humid. Kind of like a cup of ice-water on a hot day...it condensates on the outside. But why is my air handler the only one that is doing this?

Your "non HVAC" theory is exactly correct. This is not common if the unit is with-in a conditioned space. Even with insulation and the unit being in a garage, it is still possible to product condensation. If you can, check to confirm that the blower is on high speed. You can email me and I would like to give you more advice.