HVAC return air and condensate line questions

Ok, I have ran into some odd configurations before but I ran into something I have never seen before until today. So I have to ask.

The air handler for the downstairs is located in a closet off the kitchen. The return is in the hallway. When I opened it to check the filter it was dirty. I removed the filter to find the primary and secondary condensate lines run through the return cavity down into the slab then to the exterior. There was no return air duct or sealed metal housing at all, just a framed and drywall box leading into the air handler. The unit was taped off around the connection between the air handler and the box.

First, is it acceptable to not have a sealed metal housing or duct leading from the return into the air handler in a closet?

Second, if so, is it then acceptable to run the condensate lines back through this return air cavity?

Seems like this would lead to many problems if a leak developed in the condensate drain lines.

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Herb it is acceptable to have a return air in a sealed closet or wood chase as long as it is sealed properly and no contaminates from beneath the foundation or other non-conditioned space is allowed to enter the return air chase. Condensate lines in my area are allowed within the return air chase. Gas lines and exhaust flues are not allowed

Thanks for the clarification. Most of the homes in my area have air handlers in the attic or crawl space. I have seen many in sealed closets as well but all have had either flexible or rigid duct from the return to the air handler and none that I have seen have had the condensate lines run in this manner.