When you create a new team project in Team Foundation Server (TFS) 2012, using Team Explorer of Visual Studio 2010 as follows:
You will get following error:
Although you have the right permission to create team project you will get this error. This is misled message, because it’s not about the permission.
Solution: You must use any edition of Visual Studio 2012 to avoid this problem if you are using TFS 2012.