diff --git a/plugins/ipam/host-local/backend/allocator/allocator.go b/plugins/ipam/host-local/backend/allocator/allocator.go
index 5f934240..c3211fc2 100644
--- a/plugins/ipam/host-local/backend/allocator/allocator.go
+++ b/plugins/ipam/host-local/backend/allocator/allocator.go
@@ -18,6 +18,7 @@ import (
 	"fmt"
 	"log"
 	"net"
+	"os"
 
 	"github.com/containernetworking/cni/pkg/ip"
 	"github.com/containernetworking/cni/pkg/types"
@@ -253,7 +254,7 @@ func (a *IPAllocator) getSearchRange() (net.IP, net.IP) {
 	var endIP net.IP
 	startFromLastReservedIP := false
 	lastReservedIP, err := a.store.LastReservedIP()
-	if err != nil {
+	if err != nil && !os.IsNotExist(err) {
 		log.Printf("Error retriving last reserved ip: %v", err)
 	} else if lastReservedIP != nil {
 		subnet := net.IPNet{
diff --git a/plugins/ipam/host-local/backend/disk/backend.go b/plugins/ipam/host-local/backend/disk/backend.go
index 9c116993..183b76ea 100644
--- a/plugins/ipam/host-local/backend/disk/backend.go
+++ b/plugins/ipam/host-local/backend/disk/backend.go
@@ -15,7 +15,6 @@
 package disk
 
 import (
-	"fmt"
 	"io/ioutil"
 	"net"
 	"os"
@@ -85,7 +84,7 @@ func (s *Store) LastReservedIP() (net.IP, error) {
 	ipfile := filepath.Join(s.dataDir, lastIPFile)
 	data, err := ioutil.ReadFile(ipfile)
 	if err != nil {
-		return nil, fmt.Errorf("Failed to retrieve last reserved ip: %v", err)
+		return nil, err
 	}
 	return net.ParseIP(string(data)), nil
 }
diff --git a/plugins/ipam/host-local/host_local_suite_test.go b/plugins/ipam/host-local/host_local_suite_test.go
new file mode 100644
index 00000000..1867ef77
--- /dev/null
+++ b/plugins/ipam/host-local/host_local_suite_test.go
@@ -0,0 +1,27 @@
+// Copyright 2016 CNI authors
+//
+// Licensed under the Apache License, Version 2.0 (the "License");
+// you may not use this file except in compliance with the License.
+// You may obtain a copy of the License at
+//
+//     http://www.apache.org/licenses/LICENSE-2.0
+//
+// Unless required by applicable law or agreed to in writing, software
+// distributed under the License is distributed on an "AS IS" BASIS,
+// WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+// See the License for the specific language governing permissions and
+// limitations under the License.
+
+package main
+
+import (
+	. "github.com/onsi/ginkgo"
+	. "github.com/onsi/gomega"
+
+	"testing"
+)
+
+func TestHostLocal(t *testing.T) {
+	RegisterFailHandler(Fail)
+	RunSpecs(t, "HostLocal Suite")
+}
diff --git a/plugins/ipam/host-local/host_local_test.go b/plugins/ipam/host-local/host_local_test.go
index 52b1c793..87aa141e 100644
--- a/plugins/ipam/host-local/host_local_test.go
+++ b/plugins/ipam/host-local/host_local_test.go
@@ -109,6 +109,9 @@ var _ = Describe("host-local Operations", func() {
 		Expect(err).NotTo(HaveOccurred())
 		defer os.RemoveAll(tmpDir)
 
+		err = ioutil.WriteFile(filepath.Join(tmpDir, "resolv.conf"), []byte("nameserver 192.0.2.3"), 0644)
+		Expect(err).NotTo(HaveOccurred())
+
 		conf := fmt.Sprintf(`{
     "cniVersion": "0.1.0",
     "name": "mynet",
@@ -117,9 +120,10 @@ var _ = Describe("host-local Operations", func() {
     "ipam": {
         "type": "host-local",
         "subnet": "10.1.2.0/24",
-        "dataDir": "%s"
+        "dataDir": "%s",
+	"resolvConf": "%s/resolv.conf"
     }
-}`, tmpDir)
+}`, tmpDir, tmpDir)
 
 		args := &skel.CmdArgs{
 			ContainerID: "dummy",
@@ -175,7 +179,7 @@ var _ = Describe("host-local Operations", func() {
 		defer os.RemoveAll(tmpDir)
 
 		conf := fmt.Sprintf(`{
-    "cniVersion": "0.2.0",
+    "cniVersion": "0.3.0",
     "name": "mynet",
     "type": "ipvlan",
     "master": "foo0",
@@ -216,4 +220,39 @@ var _ = Describe("host-local Operations", func() {
 		_, err = os.Stat(ipFilePath)
 		Expect(err).To(HaveOccurred())
 	})
+
+	It("does not output an error message upon initial subnet creation", func() {
+		const ifname string = "eth0"
+		const nspath string = "/some/where"
+
+		tmpDir, err := ioutil.TempDir("", "host_local_artifacts")
+		Expect(err).NotTo(HaveOccurred())
+		defer os.RemoveAll(tmpDir)
+
+		conf := fmt.Sprintf(`{
+    "cniVersion": "0.2.0",
+    "name": "mynet",
+    "type": "ipvlan",
+    "master": "foo0",
+    "ipam": {
+        "type": "host-local",
+        "subnet": "10.1.2.0/24",
+        "dataDir": "%s"
+    }
+}`, tmpDir)
+
+		args := &skel.CmdArgs{
+			ContainerID: "testing",
+			Netns:       nspath,
+			IfName:      ifname,
+			StdinData:   []byte(conf),
+		}
+
+		// Allocate the IP
+		_, out, err := testutils.CmdAddWithResult(nspath, ifname, []byte(conf), func() error {
+			return cmdAdd(args)
+		})
+		Expect(err).NotTo(HaveOccurred())
+		Expect(strings.Index(string(out), "Error retriving last reserved ip")).To(Equal(-1))
+	})
 })