diff --git a/apps/files/src/components/DragAndDropNotice.vue b/apps/files/src/components/DragAndDropNotice.vue
index 66cddcaff977a..df03713601d10 100644
--- a/apps/files/src/components/DragAndDropNotice.vue
+++ b/apps/files/src/components/DragAndDropNotice.vue
@@ -25,23 +25,33 @@
 		class="files-list__drag-drop-notice"
 		@drop="onDrop">
 		<div class="files-list__drag-drop-notice-wrapper">
-			<TrayArrowDownIcon :size="48" />
-			<h3 class="files-list-drag-drop-notice__title">
-				{{ t('files', 'Drag and drop files here to upload') }}
-			</h3>
+			<template v-if="canUpload && !isQuotaExceeded">
+				<TrayArrowDownIcon :size="48" />
+				<h3 class="files-list-drag-drop-notice__title">
+					{{ t('files', 'Drag and drop files here to upload') }}
+				</h3>
+			</template>
+
+			<!-- Not permitted to drop files here -->
+			<template v-else>
+				<h3 class="files-list-drag-drop-notice__title">
+					{{ cantUploadLabel }}
+				</h3>
+			</template>
 		</div>
 	</div>
 </template>
 
 <script lang="ts">
-import { translate as t } from '@nextcloud/l10n'
 import { defineComponent } from 'vue'
+import { Folder, Permission } from '@nextcloud/files'
+import { showError, showSuccess } from '@nextcloud/dialogs'
+import { translate as t } from '@nextcloud/l10n'
 
 import TrayArrowDownIcon from 'vue-material-design-icons/TrayArrowDown.vue'
 
 import logger from '../logger.js'
 import { handleDrop } from '../services/DropService'
-import { showSuccess } from '@nextcloud/dialogs'
 
 export default defineComponent({
 	name: 'DragAndDropNotice',
@@ -52,7 +62,7 @@ export default defineComponent({
 
 	props: {
 		currentFolder: {
-			type: Object,
+			type: Folder,
 			required: true,
 		},
 	},
@@ -63,35 +73,86 @@ export default defineComponent({
 		}
 	},
 
+	computed: {
+		/**
+		 * Check if the current folder has create permissions
+		 */
+		canUpload() {
+			return this.currentFolder && (this.currentFolder.permissions & Permission.CREATE) !== 0
+		},
+		isQuotaExceeded() {
+			return this.currentFolder?.attributes?.['quota-available-bytes'] === 0
+		},
+
+		cantUploadLabel() {
+			if (this.isQuotaExceeded) {
+				return this.t('files', 'Your have used your space quota and cannot upload files anymore')
+			} else if (!this.canUpload) {
+				return this.t('files', 'You don’t have permission to upload or create files here')
+			}
+			return null
+		},
+	},
+
 	mounted() {
 		// Add events on parent to cover both the table and DragAndDrop notice
 		const mainContent = window.document.querySelector('main.app-content') as HTMLElement
 		mainContent.addEventListener('dragover', this.onDragOver)
 		mainContent.addEventListener('dragleave', this.onDragLeave)
+		mainContent.addEventListener('drop', this.onContentDrop)
 	},
 
 	beforeDestroy() {
 		const mainContent = window.document.querySelector('main.app-content') as HTMLElement
 		mainContent.removeEventListener('dragover', this.onDragOver)
 		mainContent.removeEventListener('dragleave', this.onDragLeave)
+		mainContent.removeEventListener('drop', this.onContentDrop)
 	},
 
 	methods: {
 		onDragOver(event: DragEvent) {
+			// Needed to keep the drag/drop events chain working
+			event.preventDefault()
+
 			const isForeignFile = event.dataTransfer?.types.includes('Files')
+
+			logger.debug('Drag over DragAndDropNotice', { isForeignFile, event })
 			if (isForeignFile) {
-				// Only handle uploading
+				// Only handle uploading of outside files (not Nextcloud files)
 				this.dragover = true
 			}
 		},
 
-		onDragLeave(/* event: DragEvent */) {
+		onDragLeave(event: DragEvent) {
+			// Counter bubbling, make sure we're ending the drag
+			// only when we're leaving the current element
+			// Avoid flickering
+			const currentTarget = event.currentTarget as HTMLElement
+			if (currentTarget?.contains(event.relatedTarget as HTMLElement)) {
+				return
+			}
+
+			if (this.dragover) {
+				this.dragover = false
+			}
+		},
+
+		onContentDrop(event: DragEvent) {
+			logger.debug('Drag and drop cancelled, dropped on empty space', { event })
+			event.preventDefault()
 			if (this.dragover) {
 				this.dragover = false
 			}
 		},
 
 		onDrop(event: DragEvent) {
+			logger.debug('Dropped on DragAndDropNotice', { event, error: this.cantUploadLabel })
+
+			if (!this.canUpload || this.isQuotaExceeded) {
+				showError(this.cantUploadLabel)
+				return
+			}
+
 			if (this.$el.querySelector('tbody')?.contains(event.target as Node)) {
 				return
 			}
diff --git a/apps/files/src/components/FilesListVirtual.vue b/apps/files/src/components/FilesListVirtual.vue
index e0f2c50b87f91..88bb7e2076aac 100644
--- a/apps/files/src/components/FilesListVirtual.vue
+++ b/apps/files/src/components/FilesListVirtual.vue
@@ -128,7 +128,6 @@ export default defineComponent({
 			FileEntryGrid,
 			headers: getFileListHeaders(),
 			scrollToIndex: 0,
-			dndNoticeHeight: 0,
 		}
 	},
 
@@ -259,7 +258,10 @@ export default defineComponent({
 		onDragOver(event: DragEvent) {
 			// Detect if we're only dragging existing files or not
 			const isForeignFile = event.dataTransfer?.types.includes('Files')
+
 			if (isForeignFile) {
+				// Only handle uploading of existing Nextcloud files
+				// See DragAndDropNotice for handling of foreign files
 				return
 			}
 
diff --git a/apps/files/src/services/DropService.ts b/apps/files/src/services/DropService.ts
index 075c5c397c776..372b849bcc4ec 100644
--- a/apps/files/src/services/DropService.ts
+++ b/apps/files/src/services/DropService.ts
@@ -23,13 +23,14 @@
 import type { Upload } from '@nextcloud/upload'
 import type { FileStat, ResponseDataDetailed } from 'webdav'
 
-import { showError } from '@nextcloud/dialogs'
-import { emit } from '@nextcloud/event-bus'
 import { davGetClient, davGetDefaultPropfind, davResultToNode, davRootPath } from '@nextcloud/files'
-import { translate as t } from '@nextcloud/l10n'
+import { emit } from '@nextcloud/event-bus'
 import { getUploader } from '@nextcloud/upload'
-import logger from '../logger.js'
 import { joinPaths } from '@nextcloud/paths'
+import { showError } from '@nextcloud/dialogs'
+import { translate as t } from '@nextcloud/l10n'
+
+import logger from '../logger.js'
 
 export const handleDrop = async (data: DataTransfer) => {
 	// TODO: Maybe handle `getAsFileSystemHandle()` in the future