diff --git a/vcsserver/hook_utils/__init__.py b/vcsserver/hook_utils/__init__.py
--- a/vcsserver/hook_utils/__init__.py
+++ b/vcsserver/hook_utils/__init__.py
@@ -41,14 +41,20 @@ def install_git_hooks(repo_path, bare, e
     Creates a RhodeCode hook inside a git repository
 
     :param repo_path: path to repository
+    :param bare: defines if repository is considered a bare git repo
     :param executable: binary executable to put in the hooks
-    :param force_create: Create even if same name hook exists
+    :param force_create: Creates even if the same name hook exists
     """
     executable = executable or sys.executable
     hooks_path = get_git_hooks_path(repo_path, bare)
 
-    if not os.path.isdir(hooks_path):
+    # we always call it to ensure dir exists and it has a proper mode
+    if not os.path.exists(hooks_path):
+        # If it doesn't exist, create a new directory with the specified mode
         os.makedirs(hooks_path, mode=0o777, exist_ok=True)
+    else:
+        # If it exists, change the directory's mode to the specified mode
+        os.chmod(hooks_path, mode=0o777)
 
     tmpl_post = pkg_resources.resource_string(
         'vcsserver', '/'.join(