diff --git a/homeassistant/bootstrap.py b/homeassistant/bootstrap.py
index cbc8ec5a633..4d68227d4d0 100644
--- a/homeassistant/bootstrap.py
+++ b/homeassistant/bootstrap.py
@@ -9,11 +9,12 @@ After bootstrapping you can add your own components or
 start by calling homeassistant.start_home_assistant(bus)
 """
 
-import os
-import sys
+from collections import defaultdict
 import logging
 import logging.handlers
-from collections import defaultdict
+import os
+import shutil
+import sys
 
 import homeassistant.core as core
 import homeassistant.util.dt as date_util
@@ -25,7 +26,7 @@ import homeassistant.components as core_components
 import homeassistant.components.group as group
 from homeassistant.helpers.entity import Entity
 from homeassistant.const import (
-    EVENT_COMPONENT_LOADED, CONF_LATITUDE, CONF_LONGITUDE,
+    __version__, EVENT_COMPONENT_LOADED, CONF_LATITUDE, CONF_LONGITUDE,
     CONF_TEMPERATURE_UNIT, CONF_NAME, CONF_TIME_ZONE, CONF_CUSTOMIZE,
     TEMP_CELCIUS, TEMP_FAHRENHEIT)
 
@@ -168,6 +169,7 @@ def from_config_dict(config, hass=None, config_dir=None, enable_log=True,
             hass.config.config_dir = config_dir
             mount_local_lib_path(config_dir)
 
+    process_ha_config_upgrade(hass)
     process_ha_core_config(hass, config.get(core.DOMAIN, {}))
 
     if enable_log:
@@ -281,6 +283,31 @@ def enable_logging(hass, verbose=False, daemon=False, log_rotate_days=None):
             'Unable to setup error log %s (access denied)', err_log_path)
 
 
+def process_ha_config_upgrade(hass):
+    """ Upgrade config if necessary. """
+    version_path = hass.config.path('.HA_VERSION')
+
+    try:
+        with open(version_path, 'rt') as inp:
+            conf_version = inp.readline().strip()
+    except FileNotFoundError:
+        # Last version to not have this file
+        conf_version = '0.7.7'
+
+    if conf_version == __version__:
+        return
+
+    _LOGGER.info('Upgrading config directory from %s to %s', conf_version,
+                 __version__)
+
+    lib_path = hass.config.path('lib')
+    if os.path.isdir(lib_path):
+        shutil.rmtree(lib_path)
+
+    with open(version_path, 'wt') as outp:
+        outp.write(__version__)
+
+
 def process_ha_core_config(hass, config):
     """ Processes the [homeassistant] section from the config. """
     hac = hass.config
diff --git a/homeassistant/components/notify/__init__.py b/homeassistant/components/notify/__init__.py
index 44a0639c001..fdd5d1b5d3a 100644
--- a/homeassistant/components/notify/__init__.py
+++ b/homeassistant/components/notify/__init__.py
@@ -10,8 +10,8 @@ from functools import partial
 import logging
 import os
 
+import homeassistant.bootstrap as bootstrap
 from homeassistant.config import load_yaml_config_file
-from homeassistant.loader import get_component
 from homeassistant.helpers import config_per_platform
 
 from homeassistant.const import CONF_NAME
@@ -45,8 +45,8 @@ def setup(hass, config):
 
     for platform, p_config in config_per_platform(config, DOMAIN, _LOGGER):
         # get platform
-        notify_implementation = get_component(
-            'notify.{}'.format(platform))
+        notify_implementation = bootstrap.prepare_setup_platform(
+            hass, config, DOMAIN, platform)
 
         if notify_implementation is None:
             _LOGGER.error("Unknown notification service specified.")
diff --git a/homeassistant/util/package.py b/homeassistant/util/package.py
index 50b0fffb4af..fdfbc133944 100644
--- a/homeassistant/util/package.py
+++ b/homeassistant/util/package.py
@@ -29,6 +29,7 @@ def install_package(package, upgrade=True, target=None):
         try:
             return 0 == subprocess.call(args)
         except subprocess.SubprocessError:
+            _LOGGER.exception('Unable to install pacakge %s', package)
             return False
 
 
diff --git a/tests/test_bootstrap.py b/tests/test_bootstrap.py
index df05964a79f..a0c4da894f0 100644
--- a/tests/test_bootstrap.py
+++ b/tests/test_bootstrap.py
@@ -5,11 +5,13 @@ tests.test_bootstrap
 Tests bootstrap.
 """
 # pylint: disable=too-many-public-methods,protected-access
+import os
 import tempfile
 import unittest
 from unittest import mock
 
-from homeassistant import bootstrap
+from homeassistant import core, bootstrap
+from homeassistant.const import __version__
 import homeassistant.util.dt as dt_util
 
 from tests.common import mock_detect_location_info
@@ -39,3 +41,45 @@ class TestBootstrap(unittest.TestCase):
 
             self.assertEqual(sorted(components),
                              sorted(hass.config.components))
+
+    def test_remove_lib_on_upgrade(self):
+        with tempfile.TemporaryDirectory() as config_dir:
+            version_path = os.path.join(config_dir, '.HA_VERSION')
+            lib_dir = os.path.join(config_dir, 'lib')
+            check_file = os.path.join(lib_dir, 'check')
+
+            with open(version_path, 'wt') as outp:
+                outp.write('0.7.0')
+
+            os.mkdir(lib_dir)
+
+            with open(check_file, 'w'):
+                pass
+
+            hass = core.HomeAssistant()
+            hass.config.config_dir = config_dir
+
+            self.assertTrue(os.path.isfile(check_file))
+            bootstrap.process_ha_config_upgrade(hass)
+            self.assertFalse(os.path.isfile(check_file))
+
+    def test_not_remove_lib_if_not_upgrade(self):
+        with tempfile.TemporaryDirectory() as config_dir:
+            version_path = os.path.join(config_dir, '.HA_VERSION')
+            lib_dir = os.path.join(config_dir, 'lib')
+            check_file = os.path.join(lib_dir, 'check')
+
+            with open(version_path, 'wt') as outp:
+                outp.write(__version__)
+
+            os.mkdir(lib_dir)
+
+            with open(check_file, 'w'):
+                pass
+
+            hass = core.HomeAssistant()
+            hass.config.config_dir = config_dir
+
+            bootstrap.process_ha_config_upgrade(hass)
+
+            self.assertTrue(os.path.isfile(check_file))