diff --git a/server/src/com/cloud/vm/UserVmManagerImpl.java b/server/src/com/cloud/vm/UserVmManagerImpl.java
index bc41517624e..25771648030 100755
--- a/server/src/com/cloud/vm/UserVmManagerImpl.java
+++ b/server/src/com/cloud/vm/UserVmManagerImpl.java
@@ -2777,6 +2777,8 @@ public class UserVmManagerImpl implements UserVmManager {
 	        		throw new InternalErrorException("We could not find a suitable pool for creating this directly attached vm");
 	        		
 	        	}
+	            _accountMgr.decrementResourceCount(account.getId(), ResourceType.user_vm);
+	            _accountMgr.decrementResourceCount(account.getId(), ResourceType.volume, numVolumes);
 	            return null;
 	        }
 	        
@@ -2837,6 +2839,9 @@ public class UserVmManagerImpl implements UserVmManager {
         	throw new InternalErrorException("No template or ISO was specified for the VM.");
         }
 	    
+        boolean isIso = Storage.ImageFormat.ISO.equals(template.getFormat());
+        long numVolumes = (isIso || (diskOffering == null)) ? 1 : 2;
+        
 	    Transaction txn = Transaction.currentTxn();
 	    try {
 	        UserVmVO vm = null;
@@ -2893,8 +2898,6 @@ public class UserVmManagerImpl implements UserVmManager {
 	            _networkGroupManager.addInstanceToGroups(vmId, networkGroups);
 	            
 	            _accountMgr.incrementResourceCount(account.getId(), ResourceType.user_vm);
-	            boolean isIso = Storage.ImageFormat.ISO.equals(template.getFormat());
-	            long numVolumes = (isIso || (diskOffering == null)) ? 1 : 2;
 	            _accountMgr.incrementResourceCount(account.getId(), ResourceType.volume, numVolumes);
 	            txn.commit();
 	
@@ -2926,7 +2929,9 @@ public class UserVmManagerImpl implements UserVmManager {
 	        	{
 	        		s_logger.debug("failed to create VM instance : " + name);
 	        	}
-	        		          
+
+	            _accountMgr.decrementResourceCount(account.getId(), ResourceType.user_vm);
+	            _accountMgr.decrementResourceCount(account.getId(), ResourceType.volume, numVolumes);
 	            txn.commit();
 	            return null;
 	        }
@@ -2955,11 +2960,15 @@ public class UserVmManagerImpl implements UserVmManager {
 	
 	        return _vmDao.findById(vmId);
 	    } catch (ResourceAllocationException rae) {
+            _accountMgr.decrementResourceCount(account.getId(), ResourceType.user_vm);
+            _accountMgr.decrementResourceCount(account.getId(), ResourceType.volume, numVolumes);
 	        if (s_logger.isInfoEnabled()) {
 	            s_logger.info("Failed to create VM for account " + accountId + " due to maximum number of virtual machines exceeded.");
 	        }
 	    	throw rae;
 	    } catch (Throwable th) {
+            _accountMgr.decrementResourceCount(account.getId(), ResourceType.user_vm);
+            _accountMgr.decrementResourceCount(account.getId(), ResourceType.volume, numVolumes);
 	        s_logger.error("Unable to create vm", th);
 	        throw new CloudRuntimeException("Unable to create vm", th);
 	    }