diff --git a/rhodecode/model/repo.py b/rhodecode/model/repo.py
--- a/rhodecode/model/repo.py
+++ b/rhodecode/model/repo.py
@@ -305,7 +305,7 @@ class RepoModel(BaseModel):
         :param parent_id:
         :param clone_uri:
         """
-        from rhodecode.lib.utils import is_valid_repo
+        from rhodecode.lib.utils import is_valid_repo,is_valid_repos_group
 
         if new_parent_id:
             paths = Group.get(new_parent_id).full_path.split(Group.url_sep())
@@ -316,12 +316,20 @@ class RepoModel(BaseModel):
         repo_path = os.path.join(*map(lambda x:safe_str(x),
                                 [self.repos_path, new_parent_path, repo_name]))
 
-        if is_valid_repo(repo_path, self.repos_path) is False:
-            log.info('creating repo %s in %s @ %s', repo_name, repo_path,
-                     clone_uri)
-            backend = get_backend(alias)
+        
+        # check if this path is not a repository
+        if is_valid_repo(repo_path, self.repos_path):
+            raise Exception('This path %s is a valid repository' % repo_path)
 
-            backend(repo_path, create=True, src_url=clone_uri)
+        # check if this path is a group
+        if is_valid_repos_group(repo_path, self.repos_path):
+            raise Exception('This path %s is a valid group' % repo_path)
+                
+        log.info('creating repo %s in %s @ %s', repo_name, repo_path,
+                 clone_uri)
+        backend = get_backend(alias)
+
+        backend(repo_path, create=True, src_url=clone_uri)
 
 
     def __rename_repo(self, old, new):