Tenant sites are in read-only right now message.

A Microsoft 365 administrator should run the Locked Site diagnostic first, because the web error indicates a SharePoint/OneDrive site-level or tenant-level restriction rather than a local OneDrive sync or PC-storage problem.^1^

1. Diagnose the affected OneDrive site

Since resetting the client did not help and folder creation also fails on the web, do not repeat client resets, reinstalls, cache clearing, or disk-space troubleshooting.

1. Sign in to the Microsoft 365 admin center using a Microsoft 365 administrator account.
2. Open Help & support.
3. Search for Locked Site and run the diagnostic against the affected user's OneDrive URL.
4. Review whether it reports:
   • A ReadOnly or archived lock.
   • Tenant maintenance.
   • A tenant-storage restriction.
   • Another condition requiring support.

The diagnostic validates whether the OneDrive or SharePoint site is locked or archived and may offer a corrective action. It requires an administrator and is unavailable in GCC High, DoD, and Microsoft 365 operated by 21Vianet.^2^

To locate the OneDrive URL, open SharePoint admin center → Sites → Active sites, filter for the user's OneDrive site, and copy its URL.^3^

2. Unlock it only if a lock is confirmed

A SharePoint Administrator can clear a confirmed ReadOnly lock with SharePoint Online PowerShell. Do not change the lock state unless the diagnostic or admin-center inspection confirms that this site is locked.

Install-Module Microsoft.Online.SharePoint.PowerShell -Scope CurrentUser
Import-Module Microsoft.Online.SharePoint.PowerShell

$AdminUrl = Read-Host "SharePoint admin center URL"
$SiteUrl  = Read-Host "Affected OneDrive site URL"
Connect-SPOService -Url $AdminUrl
Set-SPOSite -Identity $SiteUrl -LockState Unlock

Microsoft documents Unlock, ReadOnly, and NoAccess as the valid lock states. The operation requires SharePoint Administrator permissions; a site made read-only by a site-closure policy cannot be unlocked with this command and must instead have that policy addressed.^4^

Afterward, rerun the Locked Site diagnostic and test New → Folder in OneDrive Web.

3. Check the tenant storage pool separately

Your 1 GB used out of a 1 TB personal OneDrive quota rules out the individual quota as the obvious issue, but it does not establish that the organization’s separate SharePoint storage pool has capacity.

The administrator should:

1. Open SharePoint admin center → Active sites and review total storage.
2. Run Help & support → SharePoint Tenant Storage.
3. If the tenant pool is actually over quota, identify the largest sites and then either archive/delete unneeded content or add capacity.^5^

Deletion is irreversible after recycle-bin removal, so storage cleanup should occur only after confirming that the tenant pool is exhausted and reviewing what must be retained.

4. Check maintenance and tenant subscription state

If no lock is present:

• Check Microsoft 365 admin center → Health → Service health and Health → Message center. The same read-only message can appear during tenant maintenance.^1^
• Check Billing → Your products → Subscription status, even though the user-facing subscription appears active.
• If that page reports expiration, cancellation, or a disabled state, correct the listed licensing or billing issue. Check Billing → Bills & payments for an unpaid invoice or outdated payment method.

Microsoft documents that payment, expiration, cancellation, license-assignment, security, or compliance conditions can place SharePoint and OneDrive into read-only mode.^6^

If the restriction is attributed to security/compliance review, requires account verification, or remains after correcting the detected lock, storage, billing, or service issue, open Microsoft 365 admin center → Help & support and request a Microsoft support agent. Include the OneDrive URL, exact error, failure timestamp and time zone, diagnostic result, tenant-storage status, subscription status, and whether other users or SharePoint sites are affected.

References

1. SharePoint or OneDrive read-only error messages - SharePoint
2. Self-help diagnostics for SharePoint Online and OneDrive administrators
3. OneDrive for Business storage quota not updating for licensed users - Microsoft Q&A
4. Lock and unlock sites
5. SharePoint Online out of storage space
6. SharePoint service access affected by Microsoft 365 subscription issues