Quota Error

When I try to create a new domain using Virtualmin I get this error

Failed to create virtual server : setquota: Quota file not found or has wrong format. setquota: Not all specified mountpoints are using quota.

Yet when I check quotas from Webmin it goes thru without errors etc…I can also see the users and their quotas.

I am using Virtualmin 3.41 and here is a copy of fstab

This file is edited by fstab-sync - see ‘man fstab-sync’ for details

/dev/hda3 / ext3 defaults,usrquota,grpquota 1 1
/dev/hda1 /boot ext3 defaults 1 2
none /dev/pts devpts gid=5,mode=620 0 0
none /dev/shm tmpfs defaults 0 0
none /proc proc defaults 0 0
none /sys sysfs defaults 0 0
/dev/hda2 swap swap defaults 0 0
/dev/hdc1 /mnt/drive2 ext3 defaults 0 0

So just to verify a few things:

Log into Virtualmin, then click Webmin -> System -> Disk Quotas, that quotas are listed as disabled there?

Clicking Virtualmin -> Limits and Validation -> Disk Quota Monitoring – is the all the quota monitoring disabled?