diff --git a/app/controllers/api/database.php b/app/controllers/api/database.php
index 9d5ac716b3..da3cfc68b0 100644
--- a/app/controllers/api/database.php
+++ b/app/controllers/api/database.php
@@ -166,8 +166,6 @@ App::post('/v1/database/collections')
         $collectionId = $collectionId == 'unique()' ? $dbForProject->getId() : $collectionId;
 
         try {
-            $dbForProject->createCollection('collection_' . $collectionId);
-
             $collection = $dbForProject->createDocument('collections', new Document([
                 '$id' => $collectionId,
                 '$read' => $read ?? [], // Collection permissions for collection documents (based on permission model)
@@ -179,8 +177,12 @@ App::post('/v1/database/collections')
                 'name' => $name,
                 'search' => implode(' ', [$collectionId, $name]),
             ]));
+
+            $dbForProject->createCollection('collection_' . $collectionId);
         } catch (DuplicateException $th) {
             throw new Exception('Collection already exists', 409);
+        } catch (LimitException $th) {
+            throw new Exception('Collection limit exceeded', 400);
         }
 
         $audits
diff --git a/tests/e2e/Services/Database/DatabaseCustomServerTest.php b/tests/e2e/Services/Database/DatabaseCustomServerTest.php
index b770b2b6c3..18542961db 100644
--- a/tests/e2e/Services/Database/DatabaseCustomServerTest.php
+++ b/tests/e2e/Services/Database/DatabaseCustomServerTest.php
@@ -169,6 +169,21 @@ class DatabaseCustomServerTest extends Scope
         ]);
 
         $this->assertEquals($response['headers']['status-code'], 400);
+
+        // This collection already exists
+        $response = $this->client->call(Client::METHOD_POST, '/database/collections', array_merge([
+            'content-type' => 'application/json',
+            'x-appwrite-project' => $this->getProject()['$id'],
+            'x-appwrite-key' => $this->getProject()['apiKey']
+        ]), [
+            'name' => 'Test 1',
+            'collectionId' => 'first',
+            'read' => ['role:all'],
+            'write' => ['role:all'],
+            'permission' => 'document'
+        ]);
+
+        $this->assertEquals($response['headers']['status-code'], 409);
     }
 
     public function testDeleteAttribute(): array