diff --git a/playbooks/files/correct_mnt_state_permissions.py b/playbooks/files/correct_mnt_state_permissions.py
new file mode 100755
index 0000000..eb67a7c
--- /dev/null
+++ b/playbooks/files/correct_mnt_state_permissions.py
@@ -0,0 +1,176 @@
+#!/usr/bin/env python
+# Copyright (c) 2014 Hewlett-Packard Development Company, L.P.
+#
+# 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.
+
+import grp
+import optparse
+import os
+import pwd
+import stat
+
+
+def get_object_ids(file):
+    stat_information = os.stat(file)
+    return(stat_information.st_uid, stat_information.st_gid)
+
+
+def get_username_from_uid(old_uid, old_password_file):
+    file = open(old_password_file)
+    passwd_file = file.readlines()
+    for user_entry in passwd_file:
+        (
+            user,
+            passwd,
+            uid,
+            gid,
+            gecos,
+            home,
+            shell
+        ) = user_entry.split(':')
+        if old_uid == int(uid):
+            return user
+    return "ErrUserNotFound"
+
+
+def get_groupname_from_gid(old_gid, old_group_file):
+    file = open(old_group_file)
+    group_file = file.readlines()
+    for group_entry in group_file:
+        (
+            group,
+            passwd,
+            gid,
+            members
+        ) = group_entry.split(':')
+        if old_gid == int(gid):
+            return group
+    return "ErrUserNotFound"
+
+
+def get_new_uid(username):
+    return pwd.getpwnam(username).pw_uid
+
+
+def get_new_gid(groupname):
+    return grp.getgrnam(groupname).gr_gid
+
+
+def run_check(object, old_password_file, old_group_file):
+    (old_uid, old_gid) = get_object_ids(object)
+    old_username = get_username_from_uid(old_uid, old_password_file)
+    old_groupname = get_groupname_from_gid(old_uid, old_group_file)
+    try:
+        new_uid = get_new_uid(old_username)
+        new_gid = get_new_gid(old_groupname)
+        if old_uid != new_uid:
+            if old_username in object:
+                return(True, old_username, new_uid, old_groupname, new_gid)
+        return(False, old_username, new_uid, old_groupname, old_gid)
+    except:
+        return(False, old_username, -1, old_groupname, -1)
+
+
+def recursive_update(directory, new_uid, new_gid):
+    os.chown(directory, new_uid, new_gid)
+    for root, dirs, files in os.walk(directory):
+        for dir in dirs:
+            os.chown(os.path.join(root, dir), new_uid, new_gid)
+        for file in files:
+            os.chown(os.path.join(root, file), new_uid, new_gid)
+
+
+def main():
+    usage = "Usage: %prog -f old_password_file -d directory_to_update"
+    parser = optparse.OptionParser(usage)
+    parser.add_option(
+        "-f",
+        action="store",
+        default=False,
+        dest="old_password_file",
+        help="Path to previous system password file"
+    )
+    parser.add_option(
+        "-g",
+        action="store",
+        default=False,
+        dest="old_group_file",
+        help="Path to previous system password file"
+    )
+    parser.add_option(
+        "-d",
+        action="store",
+        default=False,
+        dest="directory",
+        help="Directory to check and apply permission updates to"
+    )
+    (options, args) = parser.parse_args()
+
+    if not options.directory:
+        print("Error: please define a directory to run the program with -d")
+        parser.print_help()
+        return -1
+
+    if not options.old_password_file:
+        print("Error: please define a directory to run the program with -d")
+        parser.print_help()
+        return -1
+
+    if not options.old_group_file:
+        print("Error: please define a directory to run the program with -d")
+        parser.print_help()
+        return -1
+
+
+    for object in os.listdir(options.directory):
+        if os.path.isdir(os.path.join(options.directory, object)):
+            (changed, old_user, new_uid, old_groupname, new_gid) = run_check(
+                os.path.join(options.directory, object),
+                options.old_password_file,
+                options.old_group_file
+            )
+            if changed:
+                print("Updating %s/%s for ownership to uid %s for %s" % (
+                    options.directory,
+                    object,
+                    new_uid,
+                    old_user
+                    )
+                )
+                try:
+                    recursive_update(
+                        os.path.join(options.directory, object),
+                        new_uid,
+                        new_gid
+                    )
+                except:
+                    print("Failed to update ownership of %s/%s " % (
+                        options.directory,
+                        object
+                        )
+                    )
+            else:
+                print("ignoring %s/%s" % (
+                    options.directory,
+                    object
+                    )
+                )
+        else:
+            print("Ignoring %s/%s as it is not a directory" % (
+                options.directory,
+                object
+                )
+            )
+
+main()
diff --git a/playbooks/step_preserve_password_file.yml b/playbooks/step_preserve_password_file.yml
new file mode 100644
index 0000000..a7228d3
--- /dev/null
+++ b/playbooks/step_preserve_password_file.yml
@@ -0,0 +1,23 @@
+# Copyright (c) 2014 Hewlett-Packard Development Company, L.P.
+#
+# 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.
+- name: "Ensure /mnt/state/etc exists"
+  sudo: yes
+  file: path=/mnt/state/etc owner=root group=root mode=0755 state=directory
+- name: "Saving a copy of /etc/passwd to /mnt/state/etc/passwd.backup"
+  sudo: yes
+  command: cp -a /etc/passwd /mnt/state/etc/passwd.backup
+- name: "Saving a copy of /etc/group to /mnt/state/etc/passwd.backup"
+  sudo: yes
+  command: cp -a /etc/group /mnt/state/etc/group.backup
diff --git a/playbooks/step_reset_mnt_state_permissions.yml b/playbooks/step_reset_mnt_state_permissions.yml
new file mode 100644
index 0000000..44f3249
--- /dev/null
+++ b/playbooks/step_reset_mnt_state_permissions.yml
@@ -0,0 +1,21 @@
+# Copyright (c) 2014 Hewlett-Packard Development Company, L.P.
+#
+# 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.
+- name: "Correcting Permissions for /mnt/state/var/log"
+  sudo: yes
+  script: files/correct_mnt_state_permissions.py -f /mnt/state/etc/passwd.backup -g /mnt/state/etc/group.backup -d /mnt/state/var/log
+- name: "Correcting Permissions for /mnt/state/var/lib"
+  sudo: yes
+  script: files/correct_mnt_state_permissions.py -f /mnt/state/etc/passwd.backup -g /mnt/state/etc/group.backup -d /mnt/state/var/lib
+- include: step_preserve_password_file.yml
diff --git a/playbooks/update_cloud.yml b/playbooks/update_cloud.yml
index 8e16be0..f09819c 100644
--- a/playbooks/update_cloud.yml
+++ b/playbooks/update_cloud.yml
@@ -167,6 +167,8 @@
   gather_facts: no
   max_fail_percentage: 0
   tasks:
+    - include: step_preserve_password_file.yml
+      when: instance_status == "ACTIVE"
     - include: preserve_ssh_host_keys.yml
       when: instance_status == "ACTIVE"
     - include: cleanup_cinder_volumes.yml
@@ -202,6 +204,8 @@
   gather_facts: no
   max_fail_percentage: 0
   tasks:
+    - include: step_preserve_password_file.yml
+      when: instance_status == "ACTIVE"
     - include: preserve_ssh_host_keys.yml
       when: instance_status == "ACTIVE"
     - include: cleanup_cinder_volumes.yml
@@ -231,6 +235,7 @@
       file: path=/mnt/state/disable-os-collect-config state=absent
     - name: "Run os-collect-config"
       command: os-collect-config --force --one
+    - include: step_reset_mnt_state_permissions.yml
     - name: Bootstrap the MySQL cluster
       command: /etc/init.d/mysql bootstrap-pxc
       when: single_controller is not defined
@@ -248,6 +253,8 @@
   gather_facts: no
   max_fail_percentage: 0
   tasks:
+    - include: step_preserve_password_file.yml
+      when: instance_status == "ACTIVE"
     - include: preserve_ssh_host_keys.yml
       when: instance_status == "ACTIVE"
     - include: cleanup_cinder_volumes.yml
@@ -271,6 +278,7 @@
     - include: mysql_init_fix.yml
     - include: stop_mysql.yml
     - include: rabbitmq_occ_disable.yml
+    - include: step_reset_mnt_state_permissions.yml
     - include: refresh_config.yml
     - name: Stop os-collect-config to avoid collission
       service: name=os-collect-config state=stopped
@@ -399,6 +407,8 @@
   gather_facts: no
   max_fail_percentage: 0
   tasks:
+    - include: step_preserve_password_file.yml
+      when: instance_status == "ACTIVE"
     - include: preserve_ssh_host_keys.yml
       when: instance_status == "ACTIVE"
     - { include: rebuild.yml, instance_id: "{{ instance_id }}", rebuild_image_id: "{{ nova_compute_rebuild_image_id }}", when: instance_status != "REBUILD" }