diff --git a/litellm/proxy/management_endpoints/key_management_endpoints.py b/litellm/proxy/management_endpoints/key_management_endpoints.py
index 726874bc82d..67dee47ca8f 100644
--- a/litellm/proxy/management_endpoints/key_management_endpoints.py
+++ b/litellm/proxy/management_endpoints/key_management_endpoints.py
@@ -1865,31 +1865,6 @@ async def _validate_update_key_data(
             detail=f"User={data.user_id} is not allowed to update key={data.key} to belong to user={existing_key_row.user_id}",
         )
 
-    # Validate team exists when non-admin changes team_id (LIT-1884)
-    if (
-        data.team_id is not None
-        and not _is_proxy_admin
-    ):
-        try:
-            _team_obj = await get_team_object(
-                team_id=data.team_id,
-                prisma_client=prisma_client,
-                user_api_key_cache=user_api_key_cache,
-                check_db_only=True,
-            )
-            if _team_obj is None:
-                raise HTTPException(
-                    status_code=400,
-                    detail=f"Team not found for team_id={data.team_id}. Non-admin users cannot set keys to non-existent teams.",
-                )
-        except HTTPException:
-            raise
-        except Exception:
-            raise HTTPException(
-                status_code=400,
-                detail=f"Team not found for team_id={data.team_id}. Non-admin users cannot set keys to non-existent teams.",
-            )
-
     common_key_access_checks(
         user_api_key_dict=user_api_key_dict,
         data=data,
@@ -1929,6 +1904,13 @@ async def _validate_update_key_data(
             check_db_only=True,
         )
 
+        # Validate team exists when non-admin sets a new team_id (LIT-1884)
+        if team_obj is None and data.team_id is not None and not _is_proxy_admin:
+            raise HTTPException(
+                status_code=400,
+                detail=f"Team not found for team_id={data.team_id}. Non-admin users cannot set keys to non-existent teams.",
+            )
+
         if team_obj is not None:
             await _check_team_key_limits(
                 team_table=team_obj,
diff --git a/tests/test_litellm/proxy/management_endpoints/test_key_management_endpoints.py b/tests/test_litellm/proxy/management_endpoints/test_key_management_endpoints.py
index e1b4a5288fb..08e9b5028d0 100644
--- a/tests/test_litellm/proxy/management_endpoints/test_key_management_endpoints.py
+++ b/tests/test_litellm/proxy/management_endpoints/test_key_management_endpoints.py
@@ -7768,12 +7768,15 @@ class TestLIT1884KeyUpdateValidation:
     async def test_internal_user_cannot_set_invalid_team_id(self):
         """
         Non-admin users should not be able to update a key to a non-existent team.
+        get_team_object raises HTTPException(404) when team doesn't exist in DB.
         """
         data = UpdateKeyRequest(key="sk-test-key", team_id="nonexistent-team")
         existing_key_row = MagicMock()
         existing_key_row.user_id = "internal-user-123"
         existing_key_row.token = "hashed_token"
         existing_key_row.team_id = None
+        existing_key_row.organization_id = None
+        existing_key_row.project_id = None
 
         user_api_key_dict = UserAPIKeyAuth(
             user_id="internal-user-123",
@@ -7782,7 +7785,10 @@ class TestLIT1884KeyUpdateValidation:
 
         with patch(
             "litellm.proxy.management_endpoints.key_management_endpoints.get_team_object",
-            AsyncMock(side_effect=Exception("Team not found")),
+            AsyncMock(side_effect=HTTPException(
+                status_code=404,
+                detail="Team doesn't exist in db. Team=nonexistent-team.",
+            )),
         ):
             with pytest.raises(HTTPException) as exc_info:
                 await _validate_update_key_data(
@@ -7794,8 +7800,8 @@ class TestLIT1884KeyUpdateValidation:
                     prisma_client=AsyncMock(),
                     user_api_key_cache=MagicMock(),
                 )
-            assert exc_info.value.status_code == 400
-            assert "Team not found" in str(exc_info.value.detail)
+            assert exc_info.value.status_code == 404
+            assert "Team doesn't exist" in str(exc_info.value.detail)
 
     @pytest.mark.asyncio
     async def test_admin_can_remove_user_id(self):